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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (42224)	1/16/1999 10:30:00 AM
From: Carl R.	Read Replies (1) \| Respond to of 53903

Skeeter, I agree that long range projections of profitability for MU are not likely to be very accurate. Just as long range estimates of "profitability" were way too high on the way down, long range estimates of profitability at this point would normally be way too low. From my experience, analysts tend to be overly influenced by the immediate past. Thus 3 years ago, analysts were looking at the immediate past (huge profits), and projecting those profits into the future. Now the immediate past is small profits or losses, so the analysts use those numbers as a baseline for projecting into the future. But in the real world that never works because the memory market fluctuates from one extreme to the other. If memory supplies tighten up, customers start double ordering and building inventory to assure supply, exacerbating the shortage, and strengthening prices. Thus I agree that the long range estimates are probably wrong. On the other hand I think that at this point in the cycle the odds are more likely that they are way too low than that they are way too high. Carl