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Technology Stocks : Semi Equipment Analysis

SOXX 299.48

-4.8%

Dec 12 4:00 PM EST

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To: Sam who wrote (47566)	4/24/2010 4:37:14 PM
From: Donald Wennerstrom	1 Recommendation of 95574

Sam, yes, we have been on a great run upwards in earnings estimates. We are probably at the point where this will moderate somewhat, at least in percentage terms in the near future. Of course, this "explosion" in earnings estimates since the 1st of the year is what has caused/continued the great performance of the "rolling quarter" prices. The problem is from an investment point of view, that at the peak of the upward price trend, the earnings estimates will still be going up when the price trend has peaked and then started the downward cycle. In simpler terms, earnings estimates are a lagging indicator to price movement. However, if the worldwide economy holds up which would continue to drive an upward demand for technology products, price could continue the present upward trend for quite some time. That is what we all hope for - no double dip recession. I should point out, while the SOX did its 3 week correction of 14 percent in January, Curr Yr earnings estimate went from 12.67 to 21.22(67%) and Nxt Yr earnings estimate went from 25.77 to 31.24(21%). Don

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