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Technology Stocks : Rockwell-Spins off Conexant (CNXT)
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To: Lou Weed who wrote (1620)9/27/2000 12:04:22 AM
From: The Ox   of 2013
 
Slightly OT:

The problem I have with the bear's case for a SOX wipeout is the disconnect with reality that the bears seem to have. They talk about the high % gains made in the SOX over the past year but they fail to acknowledge the 70% increase in demand over the past year. From the most recent BTB release: The three-month average of worldwide shipments in August 2000 was $2.44 billion. The shipments figure is three
percent above the July 2000 level and is 69 percent above the August 1999 shipments level of $1.44 billion.


While there is no way the industry can sustain this type of incredible growth, the semi bears seem to dismiss the actual numbers being shown by the book-to-bill(BTB) and bookings backlogs. We are seeing a steady decline in the BTB over the past few months and this is healthy, IMO, since the peak rates are not sustainable.

The only case for a crash in the SOX and the semi sector would be a full blown, long term deep recession in the US. I just don't see this situation setting up at this time but there are enough warning signs that one shouldn't completely dismiss this possibility. Currently, the semi-equipment sector is being trashed and is setting up a GOLDEN opportunity to buy some very good companies at a nice discount.

JMO,
Michael
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