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Author: yttire Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1264  
Subject: LEXR tanks Date: 6/30/2004 11:01 AM
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Well, LEXR is disappointing. I picked it as one of my official picks for my newly tracking picks- and it is tanking. Personally, it was a second largest holding, so OWWWW! The thing that really hurts is that I anticipated margins may continue getting squeezed, but didn't actually believe they would let it sustain into losses this quarter. Nope- wrong. My ability to predict the future is weak. In retrospect, I think I would have still bought a position, but a smaller one, considering my full knowledge of this potential risk. Risk carries the weight of failure, unfortunately.


As a long term company I still think it has a lot of potential. Frankly, there is huge demand for their product. They are going to continue to grow. What does this earnings guidance mean for their long term future?

It may mean not much- because there are competitors coming out for their input chips, and these may help them reduce costs and control margins. The competitors are just coming out of the woodwork though- it is unclear if LEXR will be able to leverage them to an advantage. Samsung cutting prices obviously did not help them enough which is a bit ominous- LEXR appears forced to drop output prices to match competition. This makes the whole region look shakey- but there still is a lot of promise. A little too risky for a huge position though.

The promise is reduced enough I am trimming its position (well, did already). I'll let the dust settle and may buy back in a little later, we'll see. I am still holding on to a 1/3 of my original position, so am not vacating the premises.
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