Coke hasn't done what Cisco has, and written off a year's worth of inventory. Ford hasn't done what JDSU has, and written off the last decade's worth of acquisitions
True, but this is the time you have to decided, is this a short term or long term problem! If it's a short term problem, then you could make tons of money going long. Plus, compareing Coke to Cisco isn't really fair. If Coke produces too many cans of their soft-drink, they can just hold it until people are thirsty again (too long and the product will go bad, tho). Also, compare Coke to Cisco and saying this makes Cisco a bad invesment isn't fair either.
btw, some of the software companies (SEBL, BEAS) have not written off a year's worth of inventory, b/c they have no inventory. I have no idea if those companies can continue to report solid earnings (actually i'm expecting them to lower earnings, but that might not happen).
What we're seeing is not uncommon actually. It's happened a few times to the semi-conductor industry (in 1985) and i think the DRAM market went through the same thing in 1995. This is, however, the worst and probably fastest decline in tech history. Both the semies and the DRAM companies make a come back every time, and the market for chips is actually the second biggest in history.
Here's a good report on the chip market
semi.org
Probably NTAP will grow earnings, over the next 5 years, faster than Ford. But NTAP's earnings will also be more volatile, and less predictable, than Ford's.
True, but chip companies have never had a smooth ride, yet they've fair pretty well.
Re: not buying stocks: There is an (unintentionally) hilarious article in tomorrow's WSJ, about a new ad campaign by Merrill Lynch, promoting bonds and diversification away from stocks.
Ya i know CNBC talked about it. |
