Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: LLCF who wrote (6588)	8/11/1998 12:07:00 AM
From: Jim Willie CB	Read Replies (2) \| Respond to of 10921

David, real question is "has full effect of Asia been discounted in current prices?" I really dont care how much prices have dropped... some of my biggest losses have come from anchoring my relative price gauges to past prices... so what if prices are down 50-60%... has Asia gotten as bad as market believes in nearterm and longterm? I think not quite... US investors largely believe Asia is one country (wrong) with a growth interruption recession (wrong) that doesnt really buy much from US (wrong) and will be back on track peach keen in a few months (wrong) and think doomsayers touting bankrupt nations and destroyed economies are lunatics (partially wrong) just a poor sharecropper's son's opinion / Jim Willie

To: LLCF who wrote (6588)	8/11/1998 2:30:00 AM
From: Math Junkie	Respond to of 10921

Re "I want to start buying sometime right? Any ideas?" My opinion is that we either have already or soon will start a gradual recovery in semiconductor equipment stock prices, because there are signs of improvement in the domestic computer industry, and when I looked at the link to total ic unit growth that Carl Johnson posted on the AMAT thread, it sure looks like a bottom. infras.com A couple of years ago, I did a comparison between AMAT's monthly closing stock price and the SIA book-to-bill going back to 1980 or 85, something like that, and what I found was that the stock price always bottomed within a month either way of the bottom of the BtB. Boy was I PO'd when the SIA quit publishing the book-to-bill! However, the point is still valid, I think, that the semi equip stock prices depend more on ic bookings than on equipment bookings, because Wall Street knows that the one will inevitably follow the other. So that is why I attach significance to the working down of computer inventories, and the appearance of the ic unit growth chart of being nearer a bottom than a top. On the other hand, I don't think we will see the rapid tripling/quadrupling of prices within a year, like we saw in the last cycle, because the valuations have not gotten as ridiculously low as they did in the last cycle, and I tend to agree with the threaders who have posted evidence that Asia will get worse before it gets better. Thus, I would expect that the lack of Asia's help will cause it to be a slower recovery this time. There is at least an even chance, IMO, that we could see lower prices from here before continuing on, but it seems really impossible to predict in that fine a detail. We don't know if Morgan's comments tomorrow will continue to reflect the dispirited atmosphere of this year's Semicon, or if he will say that he sees the light at the end of the tunnel convincingly enough for Wall Street to buy it. Personally, I doubt the latter scenario, but I have been surprised by this sector before (to say the least). If Morgan does not announce the return of good times, then I would not be surprised to see a sell-off on Wednesday, and I think another candidate for selling would be this September's earnings warnings season, which will bear close watching. I think the best advice is that given by radio commentator and newsletter writer Bob Brinker, who advises dollar-cost-averaging into the sector, with no more than 4% of one's total portfolio in any individual stock. Too bad I'm not smart enough to take his advice!