Couple of things AV,
first about XICO
i've already taken this one from $15 and out today at 21...should have outted earlier but that's another story. Take another read on their product mix, as I understand it the turn around was due to them going fabless this year, and also due to their change in product toward mixed signal for the wireless comm product sector, and also battery management. good looking moves away from the old commodity stuff you referred to. That said, I think the current price has already figured in most of the turn around play and now it's up to the earnings to support this with real numbers, similar to what you said about GGNS, I believe.
Part 2.
this also plays into why I sold off my XICO today, I've heard that fund managers are rotating out of semis and into drugs. I also see from my own research that institutions are buying into utilities. this tells me that the big money is getting defensive here. Drugs and utilities are considered defensive against corrections. Now, I am also aware that the current up cycle in semis is young, at about 6 months old, and most semi up cycles last about 2 years. even so, you have to agree that the early part of this cycle has produced one hell of a run. I think that the funds are aware that this run has probably over-reached and is due for a slight correction, even though the cycle has another year left in it. High expectations are already priced in and now it's up to the numbers to support or exceed the bets that have been placed.
So my question to you now (you knew there had to be a question!), is this: I consider you a sort of proxy for what funds are doing. Are you taking money off the table, or rotating into diversified sectors yet? Remember that during the last semi up cycle 3 years ago, also in arch I think, I asked you the same question, and that was at the start of a 2 year down-turn in the semi cycle.
-kevin |
