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: Jess Beltz who wrote (7217)	11/1/1998 11:51:00 AM
From: Zeev Hed	Read Replies (2) \| Respond to of 10921

Hi Jess, long time no see. I'll try and answer just few of your many queries. First on the BTB, it is already a derivative of shipments (in essence) so as long as it has any negative slope, conditions are still deteriorating. To have conditions improve, you actually need a BTB greater than 1, and because of the huge decline in shipments (about 70% or more from the sales rate of the top shipping month) even a BTB above 1 could still be very low actual shipping rate. Yet, I think that the market is trying to time the through, and that is when the BTB derivative turns positive. With the recent BTB at .57, I think the market has decided that the next number must be higher and I believe the recent run up was in answer to "How much worse can it get?". That is my understanding of the market behavior, yet, looking at actual numbers, AMAT never got down under 20 (the last bottom was about 11, if memory serves), and the sales rate now at AMAT is not too far of what it was during that previous through, go figure. I think that that the question is not "when the sector will turn", it has turned. Sure we are going to get some backing and filling. But short of the US market going into a deep recession (and count on Greenspan to do whatever is needed to prevent that), I would use retrenchments to load up. If you can get into AMAT and NVLS in the high 20' (which I still think is feasible), I think it is a good deal. I would also look at some secondary players like MASK and DPMI. I also like VECO (and at current prices, 27 to 30 I think it is a good deal). There are plenty of other companies that have been decimated and are still cheap, like CYMI (around 10 or so), WFR (special case with coming dilution, but still cheap if you can get in below 6). In the chip themselves, INTC and TXN are still the best safe bets, but you could get doubles in AMD, NSM, ATML and even LSI if they manage the Symbios acquisition well. Some of the graphic guys have been down on their luck, but TRID seem to be making a turn, and I would expect that even SIII will eventually turn after probing some sub 3 territory during tax selling season next month. Actually, right now, I prefer some of the chips on the equipment companies, and I like a little gamble like Rambus, it seems that their architecture is being pushed hard by Intel, and that will mean a lot of bottom line money for them. Zeev Zeev

To: Jess Beltz who wrote (7217)	11/1/1998 12:04:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 10921

LA Times article on China and its economy: latimes.com Excerpts: To ward off economic and social crises, Beijing is reverting to old habits of the command economy: government-mandated loans to state-owned enterprises, price controls on staple goods and tighter rules on foreign exchange and investment. "This is a sign of desperation," says Chi Lo, Hongkong & Shanghai Bank's director of research on China. ... "Without stimulating domestic demand, the GDP growth rate would not be 8%," Li says. "It would be just 4% or 5%." That would still be the highest rate in Asia, and perhaps in the world. Yet, for China, it is not high enough to spin a social safety net as the command economy lurches closer to a market model. Since last year, the official unemployment rate has more than doubled, to 8%; the number of worker protests has risen along with the layoffs. ... However, some of the growth is as empty as the new office towers in Shanghai. In this port city of 13 million, office space has risen nearly tenfold in the last four years and is still growing, according to research by the Shanghai office of First Pacific Davies, a Hong Kong-based property firm. In the next two years, more than 10 million square feet of new commercial space will hit the market. Even though the vacancy rate here is nearly 50% and prices have been halved, cranes that had been idle for the last 18 months as infrastructure lending dried up have started moving now that credit has returned. ... As a result, some factories are rehiring laid-off workers and continuing to produce goods nobody wants. Inventories of unsold merchandise--from color televisions to internal combustion engines--have tripled in the past nine months and now make up 17% of China's GDP, Chi Lo of Hongkong & Shanghai Bank calculates. ... Conservative official estimates say that a quarter of the country's bank loans are bad--a rate higher than the bad debt levels in Thailand, Indonesia or South Korea before the Asian crisis broke last year. Analysts say the actual rate may be closer to 40% or 50%. Clark

To: Jess Beltz who wrote (7217)	11/1/1998 1:34:00 PM
From: Investor2	Read Replies (1) \| Respond to of 10921

Re: "If we were to graph BTB ratio on the y-axis, and time on the x-axis, what is the "market" looking for? a. does the graph have to have positive slope (positive first derivative) or b. is it enough for the second derivative to be positive while the first derivative is still negative? ie the curve is becoming less negative?" That sounds like an easy question; I'll try to answer that one! <g> The reason I say it is an easy question is because the "Market" already gave us the answer. Over the past three weeks, the price of 41 semi equipment stocks as a group increased 51%. Thus, your question should really read: "what was the "market" looking for?" This HUGE, perhaps even UNPRECIDENTED gain occurred when "the second derivative turned positive." Thus the answer to the question is "b." It is enough for "the second derivative to be positive while the first derivative is still negative? ie the curve is becoming less negative?" What do you think about that line of reasoning? Best wishes, I2

To: Jess Beltz who wrote (7217)	11/1/1998 2:39:00 PM
From: Gottfried	Read Replies (1) \| Respond to of 10921

Jess, btb by month for several years... geocities.com AMAT price vs SEMI orders geocities.com As for CIEN: I've been in and out once with a small profit. Now I wouldn't touch it, because they have only 2 or 3 large (and fickle) customers giving them over 90% of revenues. G.

To: Jess Beltz who wrote (7217)	11/3/1998 8:00:00 AM
From: Mason Barge	Respond to of 10921

<<a. does the graph have to have positive slope (positive first derivative) or b. is it enough for the second derivative to be positive while the first derivative is still negative? ie the curve is becoming less negative?>> Hi Jess, long time no see. Sorry to be so inconsistent, but I've cashed out on the mini-rally and might not buy back in until I see prices 5% higher than they are now. It's hard to gauge the sector on btb, since this very sizeable rally occurred on severely deteriorating slope and negative acceleration. Any sound financial advisor would not consider investment in this sector, not only until the first derivative is positive, but also until the btb itself is positive, unless there was some increased transparency in the recovery. What I'm trying to say is, playing this sector cannot be considered an "investment" at this point. It's a gamble driven by market hysteria and greed, i.e. players hoping for a huge score on another huge upswing such as we've seen in the past. I therefore think intelligent buy-sell decisions must consider technical and momentum issues as a primary tool, together with sheer gut instinct about how long slavering traders can hold off buying into the sector. Myself, I'm going to watch the MACD for AMAT, KLIC, and TER or COHU. Most people agree that actual profit recovery will occur first in back-end, and the several larger caps appear to have more success in early recovery periods. Anticipating this sector is a game of "Indian poker" (if you've ever played it -- all the players hold their hole card face-out on their forehead so that everyone but they themselves can see it!)