"The growth of semiconductors is well beyond what anyone can imagine"
siliconinvestor.com
The last time James Glickenhaus of Glickenhaus & Co. appeared in this column, he was bullish on the companies that were building the Internet's infrastructure and were the "bricks and mortar" of the Internet. Well, little has changed. Glickenhaus is still bullish on the Internet infrastructure theme and he still favors the following names, which include: Micron Technology (MU 113 3/8), Intel (INTC 125), Altera (ALTR 86) and Texas Instruments (TXN 160).
"These companies will provide the infrastructure for whatever this technological revolution will bring," he says. "The growth of semiconductors is well beyond what anyone can imagine. The use of these devices is beyond comprehension. There is more DRAM in a Ford Taurus than there was in the vehicle that went to the moon... I don't think people understand how big this market can actually become."
Glickenhaus notes that semiconductors companies will enable third-generation cell phones with sporting events, stock quotes and Internet services. "The stocks of these semiconductor companies (as mentioned above), have made huge moves," he says, "the growth is still there and that is why I still like these companies."
"I think analysts are wrong now and earnings will be well beyond what they think"
Glickenhaus adds that all Internet companies will use semiconductors. "One hundred years ago, you would have wanted to own Standard Oil and U.S. Steel. Those are the companies that have built the last industrial revolution. The semiconductor companies are building the next industrial revolution. If you think that semiconductors are the infrastructure of the technological revolution, you want to own them and not be scared because of the level they are at. The use of semiconductors will continue to expand."
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Buffet has stated in the past that he does not invest in tech companies because nobody can predict the durability of future earnings. If there was ever a segment which did not align with this statement, it is companies like AMAT in the equipment arena for the reasons noted above. He also claimed there was no value to tech companies I believe. Shutter up AMAT's entire business and see how far any company of the present could get. The need that AMAT supplies is a great value if there ever was one IMHO and if Buffet was to invest in tech, I believe this sector, or more importantly, this company, would be they type where he would park his money for the long-term.
BK
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