<<...sure seems to support the 2 year cycle theory>>
Here are the Yahoo graphs showing the long term plots of klic, amat, nvls, klac, and ter.
finance.yahoo.com
My focus is on the period 1992 -1996 (since, as was discussed at length in Crystal's posts, the '97-'98 downturn was, in all likelihood, mostly UNRELATED to semiconductor supply/demand events)
Note that for 4 of the 5 companies (klic excluded), the stocks ran - with some pauses - from ~6/92 to ~9/95...or about 3 to 3 1/2 years. Unfortunately that is the only 'real' data available since the SEA crisis in '97-'98 obliterates the possibility of knowing if the sector would have turned down 'by itself' during that period.
Klic's retracement in late 1993 appears to be a company specific event and may have been more of a reflection of a narrow product line than a mirror of the industry as a whole. The company has made significant strides in broadening their line in the last 24-36 months (specialty materials, FCT, etc) so I believe this is less likely to occur in the future. Their market dominance in bonders has also increased during this same time period.
Also.. from Gottfried's charts (and grant you, I'm trying to be fair here. But I don't quite see the power of them):
1. In late 1993 the stock crashed by ~50% while ww semi shipments simply leveled off from 9/93 - 3/94 ... and then resumed their climb. In fact there was a small plateau in semi shipments from 1/93 to 3/93 which had no effect on the stock!
2. From 1/94 to 10/94 the stock did essentially nothing while the semi-orders were racing ahead.
O.K., maybe Klic's stock price can be LOOSELY correlated to semi-orders as a LAGGING indicator. First the semi orders then the stocks goes up months later - and this would be consistent with Klic's position as a 'back-end' provider.
3. We see the stock shoot up ~5X in 6 months (3/95 - 9/95) while the rate of semi orders has essentially maintained its same rate of increase begun 3 years earlier. Very little correlation...but the 'lagging' argument, I suppose, could still be made.
4. And now the stock crashes. From 9/95 to 9/96 it looses 80% of its value. But the stock begins this crash 5-6 months BEFORE the orders start retreating. So now Klic is a LEADING indicator??? In addition, the stock crashes 80% while the orders contract ~30%.
5. From 6/96 to 6/97 orders go up ~15%...while the stock goes up by 400%. The stock begins to crash in 9/97 and this time the semi orders begin to contract ~2 months later.
I must be dense because I just don't see any reliable patterns here.
Let say we discount the idea of using these as serious prediction devices and just apply them intellectual tools. My question is: where are we RIGHT NOW. On this 10 year plot, what is the equivalent stage for the semi cycle for 4/3/00. April, 1993? April, 1995?
None of the above?
Haven't we ALREADY significantly violated the two year rule ('peaks' in 9/93, 9/95, 9/97...)?
Guess this time is different, huh?
We've had a 30% retracement from our high. If these charts reveal any predictable pattern(s) whatsoever, shouldn't we be able to form even a slightly stronger opinion whether this is a normal correction within a powerful rally or a leading indicator of the end of the cycle?
IMO, these charts have not aided in the formation of this judgement. Have they for you? If so, is this a correction or the beginning of the end...? What information from these charts has helped you in the forming of your opinion? |
