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

To: eabDad who wrote (41093)	12/28/1998 3:17:00 AM
From: Skeeter Bug	Read Replies (3) \| Respond to of 132070

eab, i own puts on nvls, mu, cdwc and altr. first and foremost, my issue is valuation relative to fundamentals. nvls is up 200% in about 2 months based on diminutive net orders and relatively small absolute gains in orders. i think orders are about 50% of 1995. that, in an of itself is absurd, imho. i also see the low down on the food chain types talking up a storm about grrreat sales while gtw, muei, ingram and inacom report below expectation sales and hwp lowers corporate boxes up to 20% and toshiba lowers laptops up to 14% in a day. this tells me - plenty of input w/o the output. this potential juggernaut of an inventory correction, coupled with insane valuation based upon the unmitigated greed of not missing out on the next semi "turn," should lead to profitable q1 puts. i also own altr puts for valuation relative to business performance and diversification issues. so, i think my puts can make money even if what mike and earlie see in the channel isn't really there. i think it is there. as for banks... i'm waiting as i would like to see the techs crash and burn so i can have some firepower to chase the banks - they may take a while, imho.

To: eabDad who wrote (41093)	12/28/1998 11:58:00 AM
From: Knighty Tin	Respond to of 132070

Z, Welcome back. A couple of zigs to your mostly correct analysis. The build to order comment was specific to Compaq, which started a new direct order co. to offer to customers and ordered the components needed in anticipation of big sales, which may or may not occur. The rest of the huge overbuild is the standard over optimism of boxmakers stuffing the channel. Every Xmas they believe not only that sales are going to be gangbusters, but they are going to gain market share. The first may or may not happen any given Xmas season. I think it certainly did not happen this Xmas season. But the latter thesis is impossible. By definition, somebody has to lose market share. So, take these factors, a new pc co from Compaq, huge overbuild, and lower prices, and you get the mother of all gluts next month. The banking story was right on. Not only is the system under stress, but many players are at all time highs. Silly stuff. No, you do not have to believe any or all of the thesis to invest the way I do. You just have to look at the valuations of stocks and buy puts knowing that something is going to get them. I am just pointing out who I think will pull the trigger. I will gladly accept it if something totally different makes my puts work. <G> MB