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Technology Stocks : THREE FIVE SYSTEM (TFS) - up from here? -- Ignore unavailable to you. Want to Upgrade?

To: Jim P. who wrote (2369)	9/10/1998 3:04:00 PM
From: Noblesse Oblige	Respond to of 3247

Jim notes: John It is hard to get enthusiastic about a company that continues to expand it's commodity business (LCD's) where it gives firm price quotes but is subject to customer requested price reductions. It appears to me to be a replay of two years ago with MOT delaying contracts and then asking for price reductions. If I remember correctly the company did instruct that its pricing would be effected by the Japanese and Korean exchange rates. What I don't understand is why they continue to expand the low margin product capacity for MOT. ______________________________________________________________ You make a salient point, Jim, particularly in light of the fact that TFS still hasn't announced a single production order for any of its new technologies. Why expand capacity for a business that isn't earning a decent rate of return on invested capital? You also make another point, equally relevant. If the company's pricing power has been disturbed by currency exchange rates (and a strengthening dollar), why wouldn't an alteration of those conditions improve things as we go forward? Anyone looking at the currency markets knows that the dollar has depreciated big time vis-a-vis the yen over the last couple of months. I know we got hurt by the dollar strengthening. The question is will we be helped by the dollar weakening? Just a thought.