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

To: valueminded who wrote (44911)	1/29/1999 8:33:00 AM
From: Mike M2	Read Replies (3) \| Respond to of 132070

Chris, the problem is the bears have underestimated the power of this mania. The bears have done a good job of forecasting economic fundamentals but there is an unprecedented disconnect from economic reality. Everything is about positive spin- management wants to keep cashing in their stock options. Wall St keeps raking it in as long as the bull is alive much of what the public reads comes from analysts who work for Wall St firms. The government loves the increase in tax receipts from capital gains. The crowd is greed stricken and will not change its behaviour until it gets hurt badly. We are playing a confidence game the market may go on until it reaches the point of exhaustion- the point at which the money flows can no longer advance the market. Mike

To: valueminded who wrote (44911)	1/29/1999 12:14:00 PM
From: Knighty Tin	Respond to of 132070

Chris, I think there is some chance we may have had negative revenue growth last year, when all the numbers chip in. We have had down big servers and workstations revenue growth and slow growth in pc servers. We haven't seen the results from pcs themselves yet. However, with what revenues there are being channel stuffing, I think negative revenue growth is highly likely this quarter. Unit growth indeed requires more chips. More CHEAP chips. There has to be lower pricing of components to keep the unit growth moving. Right now, component prices are not falling much and is even ticking up in some cases, so I see low end pc sales collapsing on a unit basis once the inventory glut is blown out. However, that will be seen in lower orders from OEMs almost immediately. In other words, you can only see unit growth in chips and other components if you are near or below breakeven on pricing. Any moves up cut pc demand, which in turn, reduces component prices. I think this quarter will be lousy. Next quarter will be worse. And the Summer will be nuclear winter for chips and boxes. BTW, I am sorry about your Oct. Puts. But I did recommend that everyone stay light on puts, a third or less, when the Dow was near its lows. Now is the time to start adding to positions, when the market, and especially the techs, are grossly overpriced. MB

To: valueminded who wrote (44911)	1/29/1999 1:12:00 PM
From: Earlie	Read Replies (3) \| Respond to of 132070

Chris: If IDC's 92.0 million PC unit number is taken at face value, (and they are, as noted above, always optimistic), we are already into negative revs. on PCs. The "channel stuff", should be viewed for what it is, a pulling of Q1 sales back into Q4 to jack up lousy numbers, so it is actually a significantly lower number than what IDC suggests. ASPs continue to fall and the sales action is primarily at the bottom of the pricing spectrum. A seriously negative rev number for 1999 is a "given" already. The channel stuff will preclude any serious shipping of PCs for some time, so a year that looks ugly on fundamental data will not get off to a rousing start. I'll stay with my forecast of negative UNIT sales for 1999. On the basis of disappearing prospective buyers alone (Brazil,etc.), it will be ugly, never mind the strong evidence of market saturation, excess capacity, no new applications, etc. At the semi end of the game, in spite of the dreams emanating from Wall Street's analysts, it is an ongoing disaster. One need look no further than Micron's numbers for verification. Here we have the supposed "low cost producer" (which is nonsense) losing in excess of half a billion dollars over the last 4 quarters (earnings from operations). How can any rational analyst suggest that MU can or will make money when the interest bill alone will exceed $100.0 million annually, (given the current level of debt and the fact that they will be forced to spend the cash this year to try to get those TXN plants closer to the current technology, so that they won't lose quite as many dollars per chip as they do now). While on the subject, why anybody in their right mind would ADD capacity as we move into the teeth of a capacity blizzard, is beyond me, unless of course there is a bucket of cash provided that stretches the thing out and lets one dump stock (note the details of that secondary offering announced yesterday,...directors and employee options, etc) We are already well into a full blown tech sector "bust" as far as I am concerned. Now if only we could call the timing when the mad momentum players get their teeth handed to them in a small cup. (g) Best, Earlie