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

To: Czechsinthemail who wrote (6643)	8/13/1998 2:26:00 PM
From: Scott Maxwell	Read Replies (1) \| Respond to of 10921

One would expect that the semi equipment companies were the first US companies to be squashed by a freefall in capital goods demand, but will not be the last, and may be the first to recover, whenever. Now that I've said something about equips, on to Asia... Notice this cycle: Investors notice underutilized human resources of East Asia, and freed by political developments rush capital into region. Development booms, companies grow, momentum builds, prices of currencies and resources are bid up beyond world levels. Managements grow fat and corruption builds. Capital begins to reverse flow. Momentum goes negative. Corruption in loans leads to bank crisis. Asian savings flow to regions of stability, which happen to have less corrupt management traditions. Those regions use capital to buy much of the remaining equity in badly managed East Asian companies, then restructure operations. Other East Asian companies mimic new managements. In other words, the flow of capital has acted to replace the worst managements in East Asia with better managements from abroad and inject new and less corrupt traditions. This should result in stabilization and a return to growth, if political systems in East Asia allow it.