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: Stitch who wrote (6843)	9/1/1998 7:10:00 AM
From: Mason Barge	Read Replies (3) \| Respond to of 10921

<<Coke (KO:NYSE) at 55, you get the picture. >> My target on the button! There are two items about this correction that bear consideration. First, the US economy is in great shape and there will be heavy pressure on the Fed to lower interest rates, in order to weaken the dollar a little. This isn't a correction based on a domestic recession. What it is, is a correction based on hyper-inflated prices, a "bubble" burst. Just look at Coke a couple of weeks ago, at 85 with a PE of about 60! And expected long-term growth of maybe 15%! The company is strong, it was just severely overpriced. This doesn't account for prices in the semi-equipment sector, who hardly had a bubble to burst. They are based on real economic concerns a declining end-market for chips, overcapacity and declining margins in several large sectors (DRAM, CPU), lack of financing for fab upgrades in Asia -- all factors associated with a recessionary spiral. Personally, I think I saw the light at the end of the tunnel today, as one of the big Japanese banks is recapitalizing. IF the investors demand increased accountability for loan integrity as a condition, this seems to me to be exactly the correct move to restore the fundamentals of the Japanese financial sector. My advice is to buy now. Choose a semi-equipment company whose technology seems solid and will have a market when conditions improve, whose price isn't inflated (the Book value table should help here), and which is still making money. I'll make you a bet, Stitch. I'm buying COHU (OUCH! LOL Ian) at 15 1/2 and will bet that it looks good in about 6 months. I promise to beat my chest if it goes well and to beg forgiveness if it turns out badly. One thought on this -- IBM is shipping its first copper chip today (PowerPC series 750 @ 300mhz), so NVLS might bear some consideration. I don't follow it but I'll probably work up the figures and will post if I decide to buy.