Conference nyoss1::market_investing

    
    They make memory. With the Windows95 coming up, and new applications
    requiring more memory, it is in great demand.
    

    Right now they pretty much have a lock on EDO memory too.
    Open a copy of Computer Shopper and see how many times "EDO"
    appears... 

    I have made a small bundle on MU in the last year. It's a little
    pricey now and I don't own any shares currently. If and when it
    splits, I might take another look at them.
    
    They are in the planning stage of building another FAB plant out
    in Utah that will support their surging demand for their products.
    
    They also bought out Zeos.
    
    

    
    
    Folks,
    
    WHat do you think ?
    
    Sell my DEC stock and buy Micron ???  
    
    DEC seems to really lag while MU seems to skyrocket.
    
    
    Is there more upside with MSFT alliance with DEC than demand for Memory 
    chips (MU) in the next year and beyond ?
    
    I'm sick of waiting for DEC to surge ... I think mgnt at DEC is
    satisfied with our performance and I think otherwise.
    
    Comments ?  
    

    .6
    
>    I'm sick of waiting for DEC to surge ... I think mgnt at DEC is
>    satisfied with our performance and I think otherwise.
    
    Most people who have been equally sick would have sold out too.
    Possibly the worst of the selling is over. If you notice the graph,
    whenever DEC goes up, it does so on volume. Slump in prices do not have
    the corresponding volume (lately).
    
    A couple of good qrtrs ($1.25/.50) would take the stock to 60+. If I
    were you, I would hold on. I myself took up some position at $43
    recently.
    
    If DEC-MSFT alliance goes well, revenues should surge starting next qrtr.
    Hopefully profits too.

    
    
    re: .-1
    
    Everybody, even management has been saying things are looking excellant
    and prospects are looking good and you say a couple of good quarters
    ... what makes you so sure DEC is going to have earnings growth ???
    
    Can anybody show me why DEC is a good hold right now at 40.25/share ???
    
    PLEASE :!)   I'm don't see anything positive that is a money maker or
    in great demand.  

    Look at it as if you were trying to push a stalled car. A *lot* of
    effort is expended in just rocking it the few first inches. Once it
    gets rolling, it is a breeze.
    
    For a huge train like DEC, first of all, it is a monumental effort to
    just reverse the direction it was going. The same momentum is sustained
    coule really propell it up.
    
    I do not entirely disagree with you. A complacent management could
    start it down another big slide. I feel that may not happen. For the
    CEO to take inputs from people in notes file is an auspicious sign.
    DEC will survive.

    from: http://cda-dev.cda.com/investnet/daily/alert1.html
    
    Micron Technology Inc. (MU)
    
    
    
    Issue:  Micron Technology Inc. (MU)            Shares Bought: 121,380
    No. Buyers:  8                                 Dollar Value: $******
    Date: August 18, 1995                          Current Price: $71.13
    Signal II Ranking: +2
    
    It is important for many of you to know that not only are insiders not
    selling their Micron Technology shares, some have been adding to their
    positions lately. In July, eight of them increased their net holdings
    by 121,380 shares through open market buys and option exercises where
    they held on to the stock. This action is consistent with May and June
    activity where Micron insiders increased their holdings similarly. The
    action occurred with Micron shares trading in the $58 to $62 range.
    Since most of the accumulation has been via the option exercise route,
    it is certainly possible that the insiders may choose to sell some
    shares now that they have moved higher. We have, thus far, seen no
    evidence that the insiders have sold any of these newly-acquired
    optioned for shares. This action is evidence that they are willing to
    accept market risk at this time. Micron manufactures semiconductor
    memory components used mainly in computer applications.
    
    * The dollar amount does not include the cost of options that were
    exercised and held. 
    

    
    
    This stock is still going crazy ... I *never* seen a stock so strong as
    this is even during the brief Tech. selloff earlier this week and last.
    
    
    Another NEW high ... WOW!
    
    Symbol        : MU           Exchange    : New York Stock Exchange (NYSE)
    Description   : MICRON TECHNOLOGY INC                        
    Last Traded at: 77.2500      Date/Time   : Aug 31  3:56:59
    $ Change      : 4.0000       % Change    : 5.46    
    
    Volume        : 3819300      # of Trades : 2179     
    Day Low       : 72.7500      Day High    : 78.0000  
    52 Week Low   : 15.2500      52 Week High: 77.6250  
    
    

    
    Can you folks believe this, has a stock ever run up faster than this
    *ever* ???
   
    Symbol        : MU           Exchange    : New York Stock Exchange
    (NYSE)
    Description   : MICRON TECHNOLOGY INC                        
    Last Traded at: 84.6250      Date/Time   : Sep 06 12:13:50
    $ Change      : 3.2500       % Change    : 3.99    
    
    Volume        : 3929500      # of Trades : 2469     
    Day Low       : 82.6250      Day High    : 86.0000  
    52 Week Low   : 15.2500      52 Week High: 84.8750  
    

>     Can you folks believe this, has a stock ever run up faster than this
>     *ever* ???
>     52 Week Low   : 15.2500      52 Week High: 84.8750  

	That's only 455% gain from 52 week low.  There are several stocks
	that have had a bigger gain in a shorter period of time (of
	course alot of those seem to then blow out afterwards ...)

    
    
    Up over 10 points in two days ...
    
    Symbol        : MU           Exchange    : New York Stock Exchange
    (NYSE)
    Description   : MICRON TECHNOLOGY INC                        
    Last Traded at: 87.0000      Date/Time   : Sep 06  3:33:57
    $ Change      : 5.6250       % Change    : 6.91    
    
    Volume        : 403700       # of Trades : 3834     
    Day Low       : 82.6250      Day High    : 87.8750  
    52 Week Low   : 15.2500      52 Week High: 87.0000  
    

> I'm ready to mortgagte my house on this stock

	Just remember the people (digits) that did just that when DEC
	was at 199 and ready to split [again] ......

    According to a stock graph on MU it shows in May 95 a price of around
    $97.  The next day the price is around $49 with a steady rise since to
    current value.  Was there a stock split at that time?  2 for 1?
    
    If so was there a reason given for the split?  Might it happen again
    now that MU is in the $90 range?
    
    How does their P/E ratio compare to other similar companies?
    
    Regards, Mark

    
    WOW!  What a drop this stock has dealt us ... It was 98/share about two
    weeks ago, now its at 72/share and dropping.  Analysts say memory
    chips are about to drop like a rock because of price pressures and
    demand easing a bit.  They think MU could drop to as low as 60/share.
    
    p.s Glad I never purchsed this stock.

>     Analysts say memory
>     chips are about to drop like a rock because of price pressures and
>     demand easing a bit.

	i saw on analyst on NBR or W$W who said the growth of the co's
	who sell the equip. to make chips was stronger than the growth
	for the chips themselves and hence we're headed for over-production
	(and hence strong competition and hence small profit margins)

>     p.s Glad I never purchsed this stock.

	you are welcome! (remember i warned you in .15 :-)

re .17
>> its at 72/share and dropping...

For 9/27/95 it closed at 78, about where it opened

    Also, there's some new technology that emulates EDO RAM using
    conventional page mode RAM and some glue, not to mention EDO's
    benefits were overblown to begin with.

EDO schmeeDO...

Anyone try and buy an SRAM lately?  

(transl: there ain't gonna be no glut of memory any time soon)


- jeff

> Anyone try and buy an SRAM lately?  
> (transl: there ain't gonna be no glut of memory any time soon)

	I wouldn't look at SRAM's as a sign or glut or not for memory
	in general.  On Sept. 14th Cypress Semi fell 5 7/8 to close
	at 39 7/8, and Integ. Silicon fell 7 1/2 to close at 44 after an
	analyst said they see soft worldwide market for SRAM chips.

    My how fast you lose faith.  Sure MU is down, all high tech is.  MU
    still looks good to me, especially with the recent sell down.  Once
    high tech stabilizes (either high or low) companies in the right
    position will recover.  I believe that MU (along with MOT, MSFT, INTC,
    etc.) will recover rather nicely.  Analysts reports continue to
    indicate that there will be shortage of DRAM (what MU makes) at least
    through CY96.    In other words, don't bet on a sector, bet on a
    company.
    
    The company is foundamentally sound, the new fab line will increase
    sales, and it's a sellers market for memory.  
    
    But - this is essentially a one product company (I know they do a lot
    of other things, but really, one product, DRAM dominates the sales) and
    you are making a bet on the DRAM shortage continue.
    
    This is a bet I'm willing to place (but not my entire life savings!)
    
    ken b.
                         

Seems that the shortfall in Windows '95 sales is having a ripple 
effect on a number of computer technology issues, including 
Micron.

By the way, there is now a Micron Technology (MU) and Micron 
Electronics (MUEI).  Did MU spin off their PC business, or is it 
something else?

Wes

    Yes, Wes, Micron spun off their PC business.  I haven't looked at it
    all that closely, but I understand it's done well.
    
    I think it's the rumors of Win95 shortfalls that are affecting high
    tech stocks, but also MOT announced something bad (i have no details)
    and that sent them spinning and that's kept the momentum going.
    
    All this is temporary, until after MS announces the Xmas sales of
    Win95, which have to be good, because it will come bundled on every new
    pc.
    
    ken
    

> I think it's the rumors of Win95 shortfalls that are affecting high
> tech stocks, but also MOT announced something bad (i have no details)
> and that sent them spinning and that's kept the momentum going.

	See the other (general) topic about tech stocks.  MOT didn't
	announce anything bad in the sense that they reported record
	numbers, however once again the "street expectations" were
	even higher.

> All this is temporary, until after MS announces the Xmas sales of
> Win95, which have to be good, because it will come bundled on every new pc.

	let's hope so as I bought into both MSFT and INTC during the
	last mini-correction, then was making a decent profit, but
	held on and am now in the red on both with the current correction....
	:-(

    what Win95 shortfall?  Only 7 million sold, $499 Mil. profit Q1 record.
    Looks like it didn't hurt micron none niether.
    
    ken

    
    Re .-1  I wish it where really true 
    
    Whats your opinion NOW with Micron, Its seems to be fading. It hasn't
    been doing well, is now the time to get in or buy more or is a
    fundamental problem arised that is currently effecting the stock ??
    
    Its taken a pounding the last two days ...
    
    Symbol        : MU           Exchange    : New York Stock Exchange
    (NYSE)
    Description   : MICRON TECHNOLOGY INC                        
    Last Traded at: 56.5000      Date/Time   : Nov 14  3:16:43
    $ Change      : -5.1250      % Change    : -8.32   
    
    Volume        : 4003500      # of Trades : 4992     
    Day Low       : 56.2500      Day High    : 65.1250  
    52 Week Low   : 19.0000      52 Week High: 94.7500  
    
    

    Almost all of the tech stocks crashed, DEC lost close to 4 points!
    Even Netscape did not jump up by 5 points :-)

    
    	Considering that MU is now nearly 7 times next year's forecasted
    earnings, against nearly 15 for all semiconductor companies, I'd say
    is is probably very close to being a screaming buy...
    
    		the Greyhawk

>   	Considering that MU is now nearly 7 times next year's forecasted
>    earnings, against nearly 15 for all semiconductor companies, I'd say
>    is is probably very close to being a screaming buy...
    
     Unless, of course, analysts lower their earnings estimates.
    
     Maybe it's time to look into distant options.
    
      John

>     Whats your opinion NOW with Micron, Its seems to be fading. It hasn't
>     been doing well, is now the time to get in or buy more or is a
>     fundamental problem arised that is currently effecting the stock ??

	Today's loss for MU was due to it being one of two stocks
	Soundview downgraded from "buy" to "hold" (though I believe
	it remained on Soundview's long-term "buy" list).

    (quotes delayed at least 15 minutes :-)
    
    January, 1997 Micron Tech  60 Calls (ZGY AN) 10.75
    January, 1997 Micron Tech  80 Calls (ZGY AP)  8.25
    January, 1997 Micron Tech  90 Calls (ZGY AR)  6.25
    
    January, 1998 Micron Tech  80 Calls (WGY AP) 14.00
    January, 1998 Micron Tech 100 Calls (WGY AT) 10.25
    
    With MU itself at 56�.
    
    Either (a) the option premiums are cheap for such a volatile stock, 
    in which case you buy the options, or (b) the option premiums are
    expensive in which case you buy the stock and sell the call. Of (c)
    if you're particularly brave, buy twice the stock on margin and sell
    two calls.
    
    Strategy (b) says to do a buy-write (buy the stock, write the call)
    so if we buy the stock ($5650) and write the Jan97 60 call ($1075)
    after commissions our cost is about $4700. If MU recovers then in
    Jan of '97 we sell the stock for $6000. About $1400 profit on $4700
    investment in 14 months. Not too shabby, 30%, assuming MU doesn't tank.
    
    Strategy (c) would buy 200 shares on margin and sell 2 calls. This
    would cost $5650 - $2150 + comm. ~= $3600 out of pocket, plus a
    borrowed $5650. If MU is above 60 at January 1997 expiration you 
    would receive $6350� for a $3750 profit in 14 months, less (say) $100
    commissions and 14 months of margin interest (8+%?) on $5650 or $550;
    call your profit $3750-$550-$100 = $3100 on $3600, or 86%. (!)
    Of course, if MU tanks the other way you are in deep doo-doo real quick.
    
    ____________________________________________________________________
    �You bought $11300 of stock and sold it for $12000, net $700 profit
     on top of your $5650 investment.

    
    Why did this analyst downgrade MU ??? I checked the WSJ and wire and
    no reason was given.  Note, earning estimates where not downgraded.
    
    To top it off, this analyst says MU is still along term buy.
    
    
    I think this analyst firm wanted to buy this stock cheaper :!)

>     Why did this analyst downgrade MU ??? I checked the WSJ and wire and
>     no reason was given.  Note, earning estimates where not downgraded.

	I don't know if this is the case here or not, but it seems often
	times these firms will give a buy recommendation, the stock will
	go up, and then they change it to a hold recomendation because
	the price has reached the target price (ie. at the lower price it
	was a buy, at the higher price it's now only a hold).

    In Monday's Barron's, there is an article titled "Memory Lane".  The
    article quotes two analyst who are predicting DRAM prices are going to
    come down dramaticly.  Part of the problem is overcapacity from new
    plants either coming on line or being planned by Hitachi, TI, IBM and
    Toshiba.  
    
    The second problem is short term.  PC makers double ordered last May
    for November delivery, and now they don't want them.  
    
    I think you may want to re-examine your estimates for future earnings
    of Micron. Prices according to one analyst (not me!) could be down 13%
    next year, and close to double that again in 1997.  The article goes on
    to predict which companies could benefit from falling prices.  Of
    course they are software companies whose products require loads of
    memory to run. Like Adobe and Macromedia.  I suppose no one would be
    suprised to know that Microsoft made the list too.
    
    
    Bob

    
    Should I bail out of this stock now ?  I paid 59 7/8 and its DOWN to
    50+.  I know all tech are down but this stock has been dropping FAST
    lately.  
    
    Anybody who owns it, PLEASE stand up and tell me your going to hold ???
    
    Is anybody planning on buying at these levels ???
    Is anyobdy close to selling ???
    
    I thought I stole it at 59 7/8 but apparantly not :!(((
    
    

    Never try to catch a falling safe.

    
    	I like Micron a lot; but I'm waiting for it to stabilize price
    before buying. And I have absolutely no idea where that might be,
    however I do know that stabilization will be at least three trading
    days within a point uptick - and that ain't happened yet!!!
    
    		the Greyhawk

    Some questions.

    1.  when you buy a PC, do you ask what DRAM mfg is used?
    2.  what does the mfg capacity look like in a few years? (answered
        in a previous note.)
    3.  what is the capital requirements for a DRAM manufacturer?
        Any free cash flow?

    In Note 906.14 the author states: "I'm ready to mortgagte my house on
    this stock." In a different, note the author remortgages the house.
    Good luck.
   
    
    Gim



    

>    	I like Micron a lot; but I'm waiting for it to stabilize price
>    before buying. And I have absolutely no idea where that might be,
>    however I do know that stabilization will be at least three trading
>    days within a point uptick - and that ain't happened yet!!!
    
Greyhawk,
    
    What does this mean exactly "at least three trading days within a point 
    uptick"?
    
    Thanks, Mark

    
    	Mark -
    
    	Means that the stock goes up three straight trading days at less
    than one point increments. Kind of a basing at at lower level, if you
    will. That is the time to get in, since it is impossible to time peaks
    and valleys well, one goes for the "stabilization line" on drops.
    
    	A stock can drop like a rock, equalize temporary ( say one/two
    days), even jump back up a little, then drop some more as investors
    sell into the "mini"-rally. 
    
    	Always best to miss a few points off the bottom, than to get
    hammered in the middle of a fall....
    
    
    			the Greyhawk

    
    I don't think MU has stablized at all ... I think it is close but not
    yet falling.  Too much volume (volume leader for ahile now) and still
    dropping like crazy. 

    
    	I'm NOT saying MU has stabilized at all. On that score I haven't a
    clue; it could be at $28 a share for all I know. What I was explaining
    is how you can tell it has rebounded from a bottom.
    
    	With a stock like MU, I would expect a basing level to be reached
    probably during a market correction, which is entirely possible in the
    first quarter of 1996.
    
    	Which is why I like cash these days....
    
    
    		the Greyhawk

    Thanks for the tidbit, Mr. Greyhawk. Do you have a similar mechanism
    for recognizing when a stock has peaked and is on its way down?
    			Jim B.

    
    	Jim, If I had that knowledge there is no way I'd be selling
    computers for a living....
    
    	I sell because I've made money within the parameters I established
    when I purchased the stock; going on the basis that they're lots more
    companies than I have $$$.
    
    	Plenty of goofs (like selling Oracle in 1994...), but I've almost
    always made money being patient, and buying *good* management.
    
    	Anyways, it is fun....
    
    		the Greyhawk

The NY Times 12/2 and 12/3 had long articles on Fidelity and MU.
It appears from the articles that Vinik et.al have been
bailing out of MU.  Unfortunately, much of the material
mailed to Fidelity investors was dated material. So when
they received the mutual fund reports indicating that
technology stocks were still in vogue, Fidelity was actually
selling like mad.

Gim

    re -.1
    
    In january's Money, they hint that Vinik is being
    investigated by the SEC for criminal reasons.  Apparently
    he sold off 9+ million shares (of outstanding 11+) while
    telling everyone else to buy.  (Due to dated material.)
    His statements were dated Sept 30, they were mailed around
    Nov 6th.  But, hey, 5 weeks doesn't mean much in the market,
    right?  So, if you bought stock any time after Oct 1, chances are
    you bought it from Vinik.
    
    Hmm.
    
    
    Bart
    

    
    What do you folks think about MU now ... Its been dropping like a rock
    and Cirrus earnings warning didn't help ...
    
    MU currently ....  39 1/2
    
    MICRON TECHNOLOGY INC COM (MU)
    New York Stock Exchange (NYSE) Date/Time Dec 29 9:54:29 Last Traded at
    39 1/2 Previous Close 40 1/4 $ Change -3/4 % Change -1.86 
    Volume 1135200 # of Trades 644 Day Low39 1/4 Day High40 3/8 52 Week
    Low21 1/4 52 Week High94 3/4 
    
   How can a stock drop from a high of 95/share to currently 39 1/2 if
    all they have said is that DRAM prices will come under minor pressure.
    Is this selloff over done ???  Earnings are still expected to be there
    just profit margins cut slightly ... is that all bad ???
    
    Is there more to the story ?
    

    
    	Goes to show you how much influence Vinik and Fidelitys Magellan
    fund can have on a company. When a big fund is buying, others also
    start buying. Now that Vinik bailed out others followed.
    	From what I have seen/read companys have excess inventory. The
    Christmas PC sales were disapointing. Any bad news in the any of the
    PC companies is bringing the whole PC companies/components down. Less
    PC's being sold, means less memory, less software, less chips. So you
    see Intel, Mircrosoft, Micron, Cirrus Logic, Apple, Compac, etc... down
    more then 25% since there 52 week high in the summer.
    	Digital isn't getting hit as bad as others. Since our market share
    of PC's has gone up. Plus, our other industrys are doing well especially
    demand for Alpha Server products.
    
    Ron

Yesterday's WSJ had an ad for Kingston Add-on memory.
I wonder if Kingston cares about who their
memory vendor is?  This answer and the answer to the
questions posted in .40 show give an indication to
the potential for MU.

Gim

    
    	I think all the tech stocks have had too much stuffing kicked out
    of them, and would start some selective nibbling at this point. Look
    at TI, MU, MOT, etc. It's not like they are us when we were losing our
    shirt daily. MOT still grew 20+% and made $437-million in one quarter.
    
    	Over react up, and over react down.
    
    	That is the name of the game on Wall Street...
    
    
    			the Greyhawk

Today's WSJ on page A7 states that spot DRAM 
prices have dropped 37%. In a pure commodity market,
the street price for your products gets set
by the market.

I believe that the % of consumers who buy made in USA 
clothing is higher than the % of consumers who  buy PCs
with "made in USA" DRAMS.

Gim

    
    Todays WSJ states that the bill-to-book ratio fell to 1.09 from 1.10.
    
    

    re: .53
    
    > Today's WSJ on page A7 states that spot DRAM 
    > prices have dropped 37%.
    
    Is that 37% in the past month?  Past year?
    
    	Thanks,
    
    	Steve

In answer to .55.

One thing to keep in mind is that while spot market prices
have declined, much of the DRAM business is lock in 
with long term contracts. Consequently the revenue impact
may  not be as bad as the spot price indicates.  This applies
when prices go up too.


Gim

	FWIW, NBR reported tonight (Tues) that some brokerage house
	in Florida has a target of 100 for this stock within 12 months.

	This after IBM today reached a new recovery high (and I almost
	bought it when it had dipped to around 85 but felt I was too
	tech. heavy already).

	Oh yea, rumor is funds like Fidelity have been heavy buyers
	of tech stocks again.

	Even Data General is doing well.  How about Wang? :-)

    
    Wang doing well also, near a 52 week high.
    
    

    Cypress is on a tear, too. 

    Well - that depends on your point of view.
    Certainly true if you were able to buy it during the recent "the sky
    is falling this week" scare.
    
    Not so true if you've held it for awhile.
    
    Ever notice how the opinion of the future of the chip stocks does a 180
    about every two to three weeks?  There's dollars in them thar trades.
    

    by the way - book to bill ratio comes out tonight - haven't seen
    it yet.
    
    But - the word this morning was - the sky is falling.  SRAM/DRAM
    prices are/will be dropping like nuts.
    

> by the way - book to bill ratio comes out tonight - haven't seen it yet.

	You won't even see it this week.  NBR reported that the number
	won't be released til next week (I believe Monday) ....

    Yeah - looks like it.
    
    CNBC yesterday morning said it would be coming out later that day.
    I tell  you, CNBC does have some accuracy problems.
    
    

    by the way again - book to bill usually comes out around the 11th of
    every month.  I was a little surprised that CNBC was expecting it
    yesterday.
    

well... it's out.  First time in what?  5 years that it's been under 1.0...

...possible onset of a buyer's market? :-)


- jeff

    I hope so, because I've been buying a little TXN and AMAT.
    
    I'm thinking that MU is very risky these days - just because it is such
    a pure play - and memory prices are falling.
    
    I did see a very interesting interview with the CEO of AMAT last week
    though.  
    
    What he is saying is that he expects the business to grow 10 times by
    2000.  And - he isn't concerned about falling chip prices - because
    they are already working on the next generation - 16M chips.
    The idea being - if his customers don't buy the latest fabrication
    equipment - they will soon find themselves with products that are
    obsolete.  So - in some sense, they've got a captive market.
    

    Just when I decided to cut my losses and sold last Friday at $30.5 -
    
                              MICRON TECHNOLOGY (MU)
    
        New York Stock Exchange (NYSE) Last Traded at34 5/8Date/TimeMar 18
    	11:36:21 $Change 2 %Change 6.13 
    
    
    %#$#@^%#$
    bill

    
    
    re .-1
    
    The reason why the sudden surge on MU is because they say prices are
    stabilizng.  Also analysts feel the worst is over for CHIP stocks in
    general.
    
    I personally HOPE SO!!!!

	On Friday, Idaho investor J.R. Simplot sold 4.2 million shares
	and now owns 6.6% of the company.

Symbol        : MU           Exchange    : New York Stock Exchange (NYSE)
Description   : MICRON TECHNOLOGY
Last Traded at: 19.6250      Date/Time   : Jul 18 11:56:26
$ Change      : 1.6250       % Change    : 9.03

Volume        : 2127800      # of Trades : 717
Day Low       : 17.7500      Day High    : 19.6250
52 Week Low   : 17.2500      52 Week High: 94.5000

In my view, Micron is history; if not history then a 
low profitability company at best.  Let me answer three questions I
posted in .40

>     1.  when you buy a PC, do you ask what DRAM mfg is used?

Nope... I don't.  I know of no one who is willing to pay more
for MU DRAMS in their PC.

>     2.  what does the mfg capacity look like in a few years? (answered
>         in a previous note.)

There is now potentially excess capacity.

>     3.  what is the capital requirements for a DRAM manufacturer?
>         Any free cash flow?

It's huge.

One more bit of information.  Intel's book to bill ratio was >1 for
the 2nd quarter. You can draw your own inferences from the last sentence.

Gim

Can a company make money when the prices set for its products are
beyond their control?



	<<< NOTED::DISK$NOTES10:[NOTES$LIBRARY_10OF4]IBMPC-95.NOTE;1 >>>
			-< IBM PCs, clones, DOS, etc. >-
=============================================================================
Note 2616.2	 OK, $88.88 for 16Meg SIMM is getting crazy! 8-)       2 of 2
CADSYS::FENNELL "Nothing is planned by the sea and the sand" 5-AUG-1996 22:56
				   -< $5/Mb >-
-----------------------------------------------------------------------------
The KGP show in Marlboro had 16MB 72 pin 60ns simms for $85

    How many companies out there are able to control their prices ? Prices
    are in most cases determined by the market and the last years have seen 
    most industries dealing with heavy pricing pressures. 
    
    What MU seems to do:
    
    - Lower their mfg. cost. The pattern at MU seems to be that they try to
      be the low cost producer for DRAM's and not a technology leader. 
      While the asian manufacturers now go into 64 MBit chips and beyond, 
      MU converts to 16MBit. While the others have to pay a premium for the 
      latest technology in manufacturing equipment, MU might wait a little 
      ahile until the price for the equipment drops significantly. With the 
      recent downturn in the equipment business, MU might be able to complete 
      the next fab at a much lower price point.
    
    - Diversify the business. MU has a number of independent business lines
      and longer term, some of them might be significantly add to
      the overall business. PC's now account for ~1/3 of revenue.
    
    Still the stock is a very risky bet. MU might have to post a loss for
    the next quarters and their cash reserves might be depleted pretty
    quickly.
    
    Klaus

    
    MU up almost 10 points since last Friday ... someone knows something.
    
    Chip stocks are coming back into favor ... this will lead to price
    stablelization, possibly a rise shortly after.
    
    ML upgraded chip stocks today, like MU the most.

> MU up almost 10 points since last Friday ... someone knows something.

	MU has been getting upgraded by several analysts over the last
	serveral days ....

> ML upgraded chip stocks today, like MU the most.

	.... if this is the one I heard on CNN HN this morning, the
	reason for their upgrade of MU is because they expect MU's
	revenues and/or earnings to nicely exceed same Q year ago
	numbers when the numbers come out.

	Also the new book-to-bill ratio is due out this week and no
	doubt that number is expected to show a positive improvement....

    The book to bill is expected out tonight.
    
    I think the run up in price is an attempt to grab it while you can
    before tomorrow's open.
    
    The word on  CNBC today was - memory prices still falling - there is
    still excess capacity - with more coming on line.  The good news was
    that there is also increased demand.
    
    However, the word on the equipment makers is - don't expect a turn
    around until December - maybe.  Then again - that was a couple of days
    ago.
    
    The whole thing just kills me.  Market vision appears to be no greater
    than 2 days.  Two weeks ago, these stocks were absolute death.  Nothing
    has really changed - but today - you can't buy enough.
    
    Anybody catch the volume on MU today?  It was about 3 million shares
    within the first 1/2 hour or so.  Volume for the day was more than
    18.5 million shares.

	While MU may of been in the spotlight for chip makers and indeed
	had a very nice gain, Cirrus was the biggest winner.  Though still
	look how far off these stocks are from their 52 week highs.  Only
	Intel is setting new highs (like it did today, and yesterday too
	I believe).

Symb LastTrad  Change %Chg    Bid      Ask    DayLow   DayHigh  52Wlow   52WHigh
CRUS  18.875  +3.625   +24  18.875   19       15.375   19.125   12.625   61.125
  MU  26      +4       +18   V:   440100      24.625   26.125   16.625   94.5
 AMD  14.125  +1.125  +8.6   V:  1308600      13.25    14.25    10.25    36
 LSI  23.625  +1      +4.4   V:  3229200      23.625   24.375   17.125   62.5
 MOT  57.25   +1.75   +3.2   V:  2132500      55.75    57.625   47.5     82.375
INTC  82.3594 +2.4844 +3.1  82.25    82.375   80       82.625   49.8125  79.875
KMAG  20.875  +0.625  +3.1  21.125   21.25    20.25    21.25    17.625   37.4375

	The buying seemed to carry over to the equip makers too.  On
	my list only US Robotics was down today.

Symb LastTrad  Change %Chg    Bid      Ask    DayLow   DayHigh  52Wlow   52WHigh
ORCL  41.8125 +1.9375 +4.9  41.625   41.875   39.875   42       23.3281  40.375
 DEC  38.5    +1.375  +3.7   V:  1342200      37.375   38.5     30.625   76.5
 IBM 112.875  +3.625  +3.3   V:  2708000     109.75   112.875   83.125  128.875

    You too?  I sold INTC at 70.5 - good news is that I got it at 55, but
    that's not helping the pain at the moment - still have alot of ground
    to cover.  Yeah - INTC high was around 78.
    
    Now, the killer is - just two days ago, I was starting to think - hey
    that MU is looking pretty good right around now.

>> MU up almost 10 points since last Friday ... someone knows something.
> 	MU has been getting upgraded by several analysts over the last
> 	serveral days ....

	BTW, I was just catching up on some taped NBR's from this
	week and now recall the reason for the re-up in MU, and
	the analyst upgrades, since Friday.  On Friday they announced
	or in some other way news is that MU formed some kind of pact
	with the FAA to provide some techology to match airline baggage
	with passengers.  And no need to remind us all why any company
	involved with airline/airport safety is HOT right now :-(

Re: .72

>     How many companies out there are able to control their prices ? Prices
>     are in most cases determined by the market and the last years have seen 
>     most industries dealing with heavy pricing pressures. 

INTC has been able to set their own prices. For example they elected
to not implement a price decrease for the pentium chips in November.
Stock is  hitting new highs as we speak.

This is one stock where Digital employees really have better information
that analysts. It was apparent to me in the early 90's ago when employees were
pushing aside their VAXstations in favor of PC's.  The same employees
now have been through at least 3 or 4 generations of PC's.  

>     What MU seems to do:
>     
>     - Lower their mfg. cost. The pattern at MU seems to be that they try to
>       be the low cost producer for DRAM's and not a technology leader. 

Lower mfg cost does not matter if other companies are implementing a
"marketshare at all costs" strategy or if supply outstrips demand.

Gim

There's also some peculiarities around the cost of capital equipment.
Before you've built the plant, you figure out if the investment is
worth making by adding up the cost of the plant and the cost of running
it and compare that to the amount you think you'll get for what you're
making.  After you've built it, the cost of the plant more or less
drops out of site (assuming you can't sell the equipment to someone else)
and you produce as much as you can sell until the costs of input excede
the sale price of the product.

When analysts say that at $5/MB RAM is selling for less than it
costs to make, they may or may not include the amortized cost of the
fab plant.  It seems more reasonable to me that they are in fact
including that sunk cost.

R.

    RE: .80
    
    Unfortunately, Digital does not take your approach when it sells its
    chips :-(
    
    - Vikas

Goods with easy substitues (especially commodity goods) are rather
different than those produced by a monopolistic firm.
Digital seems willing to behave like the latter at times,
when in fact it really is the former much of the time.
[If you need 30K TPMC from your database, there's now just our
machines.  But if 3K is what you need, there are plenty of others.]

R.