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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: Tom_ who wrote (2499)	4/21/1999 11:20:00 PM
From: Robert Schwartz	Read Replies (2) \| Respond to of 4710

Tom - I apologize for not responding to your question surrounding my mid-40's prediction. I have been off-line for most of the past month due to a family emergency. By the time I received your request to provide support for my opinion, the stock was already below 45. It seemed as though my opinion was pointless at the time. To clarify: I have owned VTSS for much of the past 3-4 years, though I am currently out. I have continually noticed that VTSS is expected to report $.01 better than estimates by the market ("whisper"). The guys at VTSS are not only doing an incredible job managing this company, but also a superior job managing the market. It seems to me that whenever VTSS beats estimates by $.01, the market says "so what - you've done that for the past 3+ years". As we all know, share price reflects expectations. If everyone is expecting $.01 better than estimates, it is only natural that it takes $.02 to $.03 to "surprise" the market. Also, I had a strong feeling that the market was expecting a split announcement from VTSS as with PMC Sierra. When earnings came in at $.01 better than expected and no split was announced, It seemed to me logical that the past pattern of an immediate 10-20% pullback was inevitable. Instead of buying VTSS after the earnings announcement, I sunk my money into Broadcom (BRCM). Since PMC Sierra and VTSS announced better than expected earnings, I suspected (again due to past patterns) that BRCM would beat estimates by $.02 - $.03. I had no idea they would beat estimates by $.05 ($.19 versus $.14 estimated). While I am not an expert on any of these companies, I have read enough to know that all 3 (PMCS, BRCM, and VTSS) DOMINATE their market. I have shied away from PMCS as they have only recently been profitable. Had I known that BRCM would announce such stellar earnings, I would have loaded up on VTSS to ride the wave. Now I am stuck not knowing whether to bite the bullet and get in at 48-49 or see if VTSS will again pull back to 43-45. My gut feel is that all of these stocks will be down 10% or so in the normal, seasonal, "summer slowdown". In general, it has not been wise to own tech stocks between May and August. While I remaining extremely positive on VTSS and believe we will see $70 this year, I am slightly more comfortable with BRCM at this point as they are no where near their 52-week high of 95. Again, I apologize for not being more responsive to your previous request. I hope you will forgive me!!