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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Richard Nehrboss who wrote (33629)	10/9/1998 7:03:00 AM
From: Earlie	Read Replies (1) \| Respond to of 132070

Richard: You addressed your note to MB, and like you, I look forward to his comments. I'm on road for the day so here's a short early morning comment to get the topic moving. Intel is a stock market icon, hence it is a "core holding" for most investors. Unfortunately, the problems are significant. - A "one trick only" (micros) pony. - Earnings are in a multi quarter slide, margins are under pressure. - PC sales growth at consumer level has been in decline for two years - PC sales to business has dived off the graph in the last two months. (surprisingly broad variety of reasons). - Figure on "very weak at best" unit growth this year in world-wide PC sales (85 million units), and "flat at best" in 1999.... AMD alone will produce 12.0 million micros in next 12 months. A year ago it was nil. I wonder who's losing market share? - No longer a monopoly,....competitors both tough and numerous. - Pricing of micros is in a continuous slide,...steeper than cost reduction. - No new applications (to drive PC sales) in sight - Business model is broken,...can't chase buyers "up market" through production cuts at bottom end. - Cash is disappearing. - High fixed cost and significant excess capacity,....the easy cost cutting is in the past. MSFT seriously over-valued, but it's still a monopoly. Can't see shorting/putting it while so many other superb targets are available. On the other hand, INTC looks ripe to this observer. I expect the coming earnings release will not stir any new enthusiasm (i.e. mediocre), but to be coupled with a nasty warning about what's coming up. Best, Earlie

To: Richard Nehrboss who wrote (33629)	10/9/1998 10:16:00 AM
From: Knighty Tin	Respond to of 132070

Richard, don't get me wrong. I still hate these stocks. But, they are decent cos. and I find it funny that a piece of crap like MU can go up on big losses growing larger while they crash and burn on huge profits either shrinking or growing more slowly. My comments were comparative. Intel will probably see the 40s after the Xmas euphoria. This co. is losing market share and seeing huge margin and cash deterioration. The only good news is that "The Man Of The Year" is no longer ruining the day to day decisions. I have no position yet. I hope MSFT goes down. I own puts in my pizzazz portfolio. With the slowing of pc sales growth, the concentration on the low end, and the blah Win 98, I think MSFT has to fall to the 15% growth rate both Gates and the CFO predict. Which means about a 50-80% haircut in the share price. However, MSFT has been smart about always lowballing analysts and then "beating the number," so this is a snake that will be hard to kill. MB