To ALL: I discussed on post 3711 (April 1, 2000) how Gottfried's charts show that stock prices of semiconductor companies like KLIC peak 6-9 months before the actual peak of the semiconductor market. Another way to look at the chart is when the semiconductor orders are at their absolute apex and everything seems perfect - KLIC has already corrected about 50% from its peak!
A classic example of how stock prices look well into the future, not the present.
I took half my profits around that time, because the charts suggest that the only way for KLIC to make new highs over $87 would be if the actual peak of the semiconductor market is still at least 6-9 months away, a tall order indeed.
When Mr. Kulicke himself dumped half his holdings on May 3, my fingers shook as I scrambled to type as fast as I could to sell the rest of my KLIC at the market. Thankfully, I got out at over $71.
I took a bit of heat from the thread with my original post, but it looks like things are unfolding exactly as forecast. Yes, the market itself is in a downtrend, but I think the semiconductor industry itself is nearing its peak.
Business and orders are wonderful now, but a lot of supply (capacity) has been built recently, and demand is likely to slacken as the global economy cools off. The industry may record further gains over the next few months, but I suspect that between now and six months, we will see the actual peak of this semiconductor cycle.
And that means that semiconductor stocks will not make any more new highs for this cycle.
If the market rallies, all the semi stocks like KLIC will rise, but I just don't see it getting anywhere near the peak of $87 again for this cycle.
Just my $0.02 worth, of course. You don't have to listen to me. But you should listen to Mr. Kulicke. If the peak of the semiconductor cycle is 1-2 years away, with many more price gains in the future, why is he selling half his holdings now?
Finally, may I suggest that everyone take analyst projections with a healthy dose of skepticism? As a group, they have pathetic records at predicting markets. One whiff of an industry slowdown, and earnings projections will get halved, shattering all your valuation models.
Forget analysts, watch the industry insiders. Go to the Yahoo insider site linked below, and note how several insiders other than Mr. Kulicke sold 90-95% of their holdings recently!!
See you all in 12-24 months, at the market bottom, when it's time to load up again!
KLIC insiders
biz.yahoo.com
Gottfried's KLIC chart. It will look worse when May data is added.
geocities.com
pw2.netcom.com
p.s. I just read over my note after posting it, and I'm sorry if it sounds like I'm preaching. Just giving my opinion - that's what SI is all about. I honestly have no intelligent insight as to what will happen with the semiconductor market and/or stock prices. I'm just following the lead of the insiders, who probably do. |
