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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: wily who wrote (39137)	9/26/1998 8:00:00 PM
From: Carl R.	Read Replies (2) \| Respond to of 53903

What impressed me was the strength that MU showed in the mid to high 20's on days that the market was weak. That and I have long been extremely impressed by management. Despite the fact that they are repeatedly criticized on this thread by the bears, the fact is that if management had not done a very good job they would long ago have suffered the fate that the bears have been predicting for them for the last two years. Due to my respect for management, and I have occasionally taken long positions over the last several years, and once and awhile I have also taken a short position. Overall my trades have been profitable, though the long trades have done better than the shorts. As a further note let me say that I have tried to emulate what I see as the strengths of MU in running my own business, and I believe that I have some of the lowest marginal costs in my business. As for WFR I have been a shareholder of WFR on and off for the last two years, almost all on the long side. As for that company I am extremely fortunate to say that I am even. WFR is in a very similar situation to MU, but does not have the strength of management that MU has, and they have not executed very well. That said, if WFR can survive, they will ultimately be worth much more than their current $4+ a share, or less than half of book value. The biggest problem is that they continue to disappoint their shareholders, even when the shareholders don't expect much. At this point I am waiting for the stock to show some signs of strength or extra volume before going long again. My trading position is based on my view of the world market. I expect a very strong year in PC sales next year due to Y2K. I believe that sales have been hurt over the last two years as MIS diverted money to software, but they will ultimately replace all older computers before the end of next year, actually probably before 9/9/99. Also I believe that the switch to build-to-order caused a one-time decrease in sales of chips as inventories were depleted. The implication of these beliefs is that the market for semiconductors will be much stronger for the next 12 months than the last 12 months. Note that I also believe that after a big spending spree on PCs in the next 12 months, the following 12 months will be slow again. Thus I believe that semi-conductor equipment stocks will not fully recover as the semis will recover first before ordering equipment, and that semi-equipment sales will not fully recover until 2001 or 2002. Given these beliefs, I had to choose how to play this trend. Thus I have been investing in CPQ, SEG, and MU, all of which have been strong. Note that if my scenario comes to pass semiconductor companies will not build new fabs, but will increase fab utilization rates instead, which does imply a recovery in WFR next year some time as well. However I am waiting for the stock to show strength before entering. As for the impact of RDRAM, etc, I think that memory is memory and that anyone who can produce one kind can produce another. MU has shown that they are extremely adept as changing from one generation to another, so it really isn't a factor in my decision. Can MU avoid the fate of WFR - using extra money to create additional oversupply? That is a new wrinkle as far as I am concerned. In your post you asked how I knew than INTC would come along, and my answer is that I certainly didn't know or expect it. I wouldn't have been surprised by additional TI money, but from INTC? I never would have guessed. I will have to think about the ramifications further. Good luck, Carl