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To: SJS who wrote (6694)	1/19/1999 1:09:00 PM
From: The Ox	Read Replies (1) \| Respond to of 14427

Steve, No doubt the stock price of NVLS looks to be ahead of itself. One of the main problems we face when attempting to "value" stocks in the semi industry is determining where is the company in the current product/industry cycle? Since R+D is expensed and not truly considered an asset, many semi stocks will look excessively valued by traditional accounting measures when in reality they are terrific bargains. We are still near the bottom of the semi cycle, IMO, which leads me to believe that we should not value these stocks strictly on past performance but a very heavy weighting should be placed on future expectations with heavy emphasis on company guidance. When we are near a peak in the industry cycle, we should be more careful to look at the actual performance of the company in the near term and be cautious when looking at forward guidance.