Jacob, I thought some more about your recent sobering post, No. 60683. I appreciate your inputs, and I enjoy discussing general market views like this. I think most here would agree that the big picture going forward for internet/telecom affects AMAT quite a bit.
Let me summarize my attempt at taking the opposing viewpoint below. Please get back to me if you have any comments.
1. Other than the constant of human nature, what else is there to cause this boom/bust pattern to repeat those other historical patterns in such detail as we go forward from here? Maybe the human part is all you need, but it seems that there are a lot of other factors which are specific to each time a new technology gets mass-adopted.
2. This situation seems a lot different than previous cycles to me in that the internet, bandwidth, and chip speed are all going to experience major growth going forward. The microprocessor was mass-adopted quite a while back, and yet we did not experience these cycles. Could it be that every once in a while we go all the way through your 7 steps, but most of the time we do not, and could it be that it is simply unpredicatable each time? I am thinking there were many great leaps in technology, but not that many really bad bust periods that followed.
3. This boom/bust was driven by by several things I think, which include the internet being mass-adopted, the pre-Y2K mass-purchase of computer equipment (a lot will need replacing soon), the Fed hitting the gas at the worst time because of Y2K fears, and then having stepped too hard on the brakes afterwards, favorable demographics, and finally, the end of the cold war (boosts economy since defense spending was like a tax).
4. My last point is that the internet is perhaps the greatest invention since the printing press, and is still early in its adoption cycle world-wide. In the bandwidth area, we hit a roadblock (last mile), which may be giving way in a few years. Since there is so much to look forward to, why will have consolidation to the degree you mention? In short, maybe this is just a huge bump in the road, rather than similar to the chariot, railroad, radio, or canal-building events, which seem to me at least to be inventions that did not change much as time moved forward.
Having said all that, we very much need to study history, and inputs like yours are much appreciated by me, and many others here. I may take your point of view on this eventually, still thinking about it.
Thanks.
John
P.S. Wrote this one quick also, I am approaching this like conversation. |
