Astute investors say it is never different. They invest through the rear view mirror. Charts, numbers, and history are their guides. It is always different. The world changes. We get older. The key question is about material differences. Have the technological advances that continue to change the face of our world made a material impact on the prospects for investors? Has the maturing semiconductor industry changed the dynamics of the industry in a way that materially impacts the prospects for investors?
I believe these questions need to be answered through fundamental analysis. I listen to replays of earnings conference calls and presentations at technology conferences for 8 semi and semi-equip companies. I attempt to understand the prospects for these companies and the industry. I attempt to distinguish secular trends from cyclical trends. I try to determine which parts of the industry are cyclical, cyclical growth, or growth vehicles. I try to separate cycles generated by macro economics events from cycles generated by industry dynamics. I try to get a handle on current industry dynamics.
Fundamental analysis of the semiconductor industry is a tough job and one that has not, traditionally, been fruitful. I think we are at a juncture where it is increasingly likely to be fruitful and I am willing to share the effort. |
