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

To: Knighty Tin who wrote (41013)	12/26/1998 7:03:00 PM
From: Jess Beltz	Read Replies (2) \| Respond to of 132070

Michael, I am a Finance professor (currently) at a regional extension of Indiana University (in Fort Wayne, Indiana.) I just finished 5 years at University of Science and Technology in Hong Kong, and had the opportunity to witness a real market calamity. In fact, i lost my shirt last year investing because i did not see the extent of the linkage between the asian markets and the US in semiconductors. I had just started to invest in the sector and was focused on companies without looking at the changing sector scene. In addition, i was using a heavy amount of leverage, and tried to defend my positions instead of flushing all margin at the first sign of trouble. I myself find it interesting that academics hide behind market efficiency arguments and fear to tread in the stock market themselves, or often do with disastrous results (witness the Long-term capital management team.) In the end, one must take the money and go to the marketplace, pay the dues, and learn how to invest. Simulations won't do it. That's what i've been doing, and it strikes me that it would be desireable to share some of the experiences with the many novices who are also trying to figure out how to use the wealth of information available to invest in an intelligent, amateur style. I think that you are absolutely right about the current state of computing and the fact that, at the moment, individuals can do everything they want with existing boxes. That's why i think the current way to play web-growth driven expansion is through companies that provide infrastructure technology for bandwidth extension and high-speed bulk data transmission and storage. The next generation of sexy applications, voice recognition and visual data transmission is still a few years off (and requires software as well as hardware/horsepower developments to become commonplace) but those changes are coming, and when they are ready, the current generation of chips will be as worthless as hand-crank adding machines. I think we differ mostly about timing. You see a longer-term hiatus than i do. I think you'll be interested in knowing that while not taking it to the level you do, Infrastructure also believes that this rally in semiconductor stocks is far ahead of itself. While you think the course of the sector is much farther down, they believe that the sector did reach the bottom near the end of August, but that prices should still be closer to those lows than to the level they are now based on fundamentals. That is, much of the rally off of the August lows is the (irrational) buying of the greedy not wanting to miss being in on the beginning of the next big semiconductor rally. That's why i indicated that the timing issue is one that i'm still trying to wrestle with and do not understand. Could the market be being manipulated? Possibly, but note that the current rally in semi stocks has taken place without a lot of analyst ugrades (at least in the companies i follow, but admittedly, that is a small universe.) I also feel that upgrading technology has historically been an important component of cost control, and i look for that trend to continue. happy new year. jess.