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Cymer Inc. Message Board

  • beercur beercur Aug 16, 2001 2:05 AM Flag

    The dollar weakness

    It has come to the point that any good news should be reported if only because it will make all of us sleep better.The dollar has slipped over the last couple days. This may be perceived as a bad sign for the US economy but I disagree. However, the reason for it, are basically all bad. The projected Federal surplus is next to nothing now, the US economy is hurting, and, the one positive, the Fed continues to reduce rates.

    The weaker dollar means that US manufactured goods will now cheaper to sell abroad. Not that US companies will be quick to reduce the price overseas, which means overseas' sale profits will be higher. Various companies after a considerable belt tightening are ready to take off again when the US economy recovers. Now this may take a little while but we are not that badly off and the recovery is starting to trickle in. I believe we will by years end will see the light at the end of tunnel, many doubts about the economy will be put to bed, and the NAZ will be at around 3000. A 50% gain? Yup that's what I think, for what it's worth.

    Some winners.
    AMD... A better processor than Intel, and a dedication to Flash, will be a winner? I think so at current price of 14 and change.

    T... Sell of assets will continue and with Comcast wanting to buy the Internet part of it thereby increasing the price of it, and a current book value of over 30, T is highly undervalued. Never mind the large investment in ATMH, the next wave of Internet heaven, and other strides they made to diversity when they actually cared about such things.

    The Losers...
    MSFT... I personally don't like the whole Wintel alliance. I'm just waiting for Linux to become GUI and put this beast out of its misery. Microsoft does two things well. Marketing their products, partly through their monopoly power, and very good development tools. Visual Basic, MASM, and C++ are a joy to play with. It's very easy if you spend a couple days studying it, with a good teacher, to develop product for the Window's environment. The former point of the Monopoly power is slowly coming to an end. The government has a good case that will ultimately deal a 80's IBM type sentence. They will be under such restrictions and scrutiny that they will not be able to capitalize on their monopoly. At a P/E of over 45 it is over valued.

    CSCO... Now I never liked they business model. Buying their competitors or possible competitors and never making any real money per share. They may be the future but so what if they continue to devalue their own stock through dilution.

    IMHO, In the upcoming months the above losers will even do well. But ultimately they will lag the market as a whole. If you are into short term gain invest in European Mutal fund. If nothing else the value of the dollar will probably continue to go down. If it does that will mean a profit margin of possibly 15% even if the stock remains at the same price.

    Having said all that I'm still sitting on my hands with no money invested besides my 401K. I believe there is a bit more down side and I'm waiting for the stock market to totally tank before I invest. Otherwise I'll be happy to take my money out and pay down my credit outstanding....


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    • "I'll be happy to take my money out and pay down my credit outstanding...."

      If you have credit card debt at 20% or similar, you're always better paying it off rather than putting money into stocks. Why? You have to make well over 20% per year to cover the interest, not to forget you need to pay tax on any stock market profits. The part that takes the real discipline is to not use the cards or cut them up when your balance goes to zero.

      I think your time to invest is coming soon. Good luck.