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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (6541)	8/8/1998 10:50:00 AM
From: Joseph Beltran	Respond to of 10921

"I also applaud the liberation of eastern Europeans and the continued capitalistic freedom of Asians... but their mindless expansion in copycat style of Japanese economy is precisely the cause of the unprecedented capacity glut inflicting almost the entire technology field... very little Asian economic development has been based on sound financial planning... (pisspoor bank systems notwithstanding) ... they are playing simultaneous catch-up and duplication of the Japanese miracle export machine... they did not have markets 15 years ago, and now they are all dumping supply and capacity on the world markets... you dont get it" and despite what japan and s.k. are saying right now, I don't expect them to make any substantive changes in their economic models. s.k. in particular will only make TOKEN changes which are absolutely necessary to permit them to contunue to get IMF dollars. In the final analysis, very little will be changed. Personally, I think we are throwing good money away through these IMF and World Bank "loans". Let s.k. and indonesia default. That will force japanese banks to write off those loans and in the future banks will be alot more cautious with their lending practices.

To: Jim Willie CB who wrote (6541)	8/8/1998 2:41:00 PM
From: Ian@SI	Respond to of 10921

Spiny, you are not only a naive jerk, but insist on putting words in my mouth.. ... and you have the nerve to insinuate someone else might be nasty. Compared with your behaviour, the rest of the world's population could only be sweetness and joy. Hopefully, this is not the true you, just an aberration caused by losing a few dollars on the short side of the market. There is no question of my regard for you, Ian.

To: Jim Willie CB who wrote (6541)	8/8/1998 5:54:00 PM
From: Ian@SI	Respond to of 10921

More bad news for the Semi Equipment bears in today's WSJ. ...Shares of semiconductor-equipment makers are also reaping the benefits of an improved chip-industry outlook. "Its a growing perception that the cutbacks by semiconductor makers are starting to reduce overcapacity," NationsBanc Montgomery Securities Inc. analyst Brett Hodess said. "If the overcapacity comes to an end, then semiconductor makers will start to buy equipment again." "DRAM pricing is marginally stronger right now than it has been for the last several months," Mr. Hodess added, noting that DRAM prices are commonly used as a barometer by which to measure the semiconductor industry. ... For subscribers, complete story may be found at: interactive.wsj.com I tend to agree with Katherine's point that shutting down existing capacity should not be interpreted as signs that a boom is imminent. FWIW, Ian. (Just reporting the news :-))

To: Jim Willie CB who wrote (6541)	8/8/1998 6:11:00 PM
From: Ian@SI	Read Replies (2) \| Respond to of 10921

More bad news for the bears from the Cover Story of Barron's. Geez, when Barron's starts publishing bullish information, things must be a lot better than I thought. :-) ... Even the somewhat pedantic cast of Cohen's prose affords a measure of comfort to panicked clients. In the note, she takes on various bear concerns and offers measured, temperate responses: No, U.S. corporate earnings aren't going to be scissored by a combination of poor Asian demand, weak corporate pricing power and growing wage inflation. In fact, S&P 500 operating earnings per share should be better this year than most people think. Her preliminary estimate for its second-quarter growth in the number is about 5.7%. And the quarterly comparisons should get easier in the second half when stacked up against progressively weakening results in comparable 1997 periods. And even if the global economy doesn't improve later this year as she expects, companies in the S&P should still be able to notch second-half earnings growth of 5% or even 6%. Likewise, she feels that the menace of the Asian economic crisis and the rise in the dollar have been overblown. The tilt of U.S. exports toward value-added goods and services makes them less vulnerable to competition on the basis of price and relative exchange rates. Too, such concerns ignore the many benefits that a stronger greenback confers on U.S. companies. Among other things, it lets them pay less for raw materials and semi-finished components sourced overseas. The bounding buck also allows companies to make advantageous foreign direct investments in overseas facilities and operations, which down the road will burnish the bottom line. Finally, she sees little to no sign of a recrudescence in inflation. Rising inflation and its unwanted progeny, higher interest rates, are what typically end bull markets. Yet the best measures of economy-wide inflation, such as the GDP deflator, still sport annualized rates under 1%. Productivity increases continue to insulate U.S. corporate profit margins from erosion due to rising labor costs. Much of the 4% jump in second-quarter service compensation costs represents "bonuses and other forms of variable compensation," according to Cohen's latest note. These are discretionary items that can be cut if company profits become pinched. ...

To: Jim Willie CB who wrote (6541)	8/8/1998 6:51:00 PM
From: Stitch	Read Replies (1) \| Respond to of 10921

Jim Willie, <<Spiny, you are not only a naive jerk, >> I hate to see someone who has an intelligent argument pepper it with this kind of statement. Personalized insults like this suggest to me that the poster who uses them isn't worth reading. It also breaks the rules of SI. Spiny's arguments have been respectful. Why can't yours? Stitch

To: Jim Willie CB who wrote (6541)	8/10/1998 12:24:00 AM
From: spiny norman	Read Replies (1) \| Respond to of 10921

JWCB, I'm not sure what specifically set you off, other than that I'm both naive and a jerk and that I disagreed with you, but Hey, I can understand that if you put your money where your mouth is on semi equip stocks, you've probably been under a little stress these last few days. So let off some steam. I'm there for you. Granted, the Asian crisis has certainly generated deflationary forces. I do not dispute that. What I originally said was that the semi business is better suited to adapt to a deflationary environment because, well, the semi biz has always operated in a deflationary environment. The semi biz has been characterized by rapid and persistent price declines, mainly due to micro economic conditions specific to that business - i.e. economies of scale and technological advances. (This is nothing new, its called "Moores Law" after the person who first popularized the notion.) For about 35 years prices of basic computing units (MIPS, RAM cells, a NAND gates, whatever) have been declining 20% per year ON AVERAGE. Even if we have general price deflation in this country IF YOU ACCEPT THAT MOORE'S LAW HOLDS, semi production costs will decline to the point that any excess supply clears the market profitably. The reason that this business has grown so large is that the product has fallen in price so much that demand has exploded. Primary semi demand has grown through 2 oil crises, abandoning the gold standard, the American S&L crisis, the Vietnam War, disco, the Browns leaving Cleveland etc.. We will also survive the Asian crisis. regards spiny re moore's law, For the foreseeable future, I do. PS: ian and stich, I read the responses and thanks for noting that thus far I've been reasonably civilized.