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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Katherine Derbyshire who wrote (26789)	12/1/1998 6:40:00 PM
From: Duker	Read Replies (1) \| Respond to of 70976

<<With all due respect to Ms. Strunk, it's fundamentally impossible for a sector to grow faster than its customers over the long term.>> Desktop operating system software company and desktop computer manufacturers? --Duker

To: Katherine Derbyshire who wrote (26789)	12/1/1998 7:04:00 PM
From: Chuck Williams	Read Replies (2) \| Respond to of 70976

For your enjoyment: OK, everyone. I have now become a "Perma-Bull" (c). I have placed all my money into an expertly managed mutual fund. I happily pay my dutiful 12b1, front end, back end, and money manager's country club fees -- and I smile. My eyes well up with tears when I see Peter Lynch on TV. He is sooo smart. I send my mutual fund manager Christmas and Birthday cards. I have my bi-weekly contribution automatically deducted from my paycheck. I take advantage of dollar cost averaging. I compare NAV's with my friends -- and we smile. I no longer need to pay attention to fundamentals, market shift, "head-fakes", momentum, or industry trends. I have cancelled my Wall Street Journal subscription and avoid CNBC. I wear "reeel-dark" (c) sunglasses when I surf to avoid any interaction with information related to, or concerned with, equities. You'll find me on the Dilbert and South Park web sites. If you find time between your P/E ratios and P/F charts to visit, don't forget to say HI. I expect to retire early. I can do it with the 15%+ compounded gains from my sound investments. I will pay for my children's college education with the proceeds from my recent EBAY and AMZN purchases. The Internet is soooo hot, I'm getting in at the ground floor. I have 15 years before I retire; any small downturn is a blip on the screen. My cash reserves are zero. I can withdraw from my mutual fund if necessary. I buy almost everything with credit cards and don't pay off the balance every month. It's OK, interest rates are low; everyone does it. Maybe I'll take up golf. It's what all the affluent do... Anyone want to join me? Sayonara, suckers.

To: Katherine Derbyshire who wrote (26789)	12/1/1998 7:08:00 PM
From: Clarksterh	Respond to of 70976

Katherine - With all due respect to Ms. Strunk, it's fundamentally impossible for a sector to grow faster than its customers over the long term. If the equipment industry grows faster than the chip industry, it will consume a larger and larger fraction of chip industry revenues, thereby squeezing chip industry profit margins and forcing reductions in capital expenditures. Over the very long hall (30 years) this is true. But in the shorter term, say 10 years, it is possible to grow substantially faster than your customers if your equipment helps them save money in some other area. This is the basis of the economists' mysterious 'productivity', and it is the reason that many new industrial technologies initially grow substantially faster than their customers. Infrastructure had an interesting graph a year ago that showed capital equipment budgets in the semi industry as a percentage of revenues. Surprisingly it showed that back end equipment has grown at about the same rate as their customers, but front end has grown substantially faster. It showed that front end expenditures has gone from 6% of revenues in the early 80's to a peak in the low 20's in late 95. (The exact numbers are from memory, so take it with a grain of salt, but they are ballpark.) Clark Note - Of course on an even shorter timescale (5 years) this faster growth of capital equipment can be magnified by a wipsaw effect. Capital equipment companies seem to experience deeper downturns and higher rises.