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Technology Stocks : ISSI a great opportunity
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To: Taro who wrote (1019)10/6/2000 2:17:57 PM
From: Czechsinthemail  Read Replies (1) of 1058
 
My feelings about the market today are mixed. On one hand, I think many tech stocks have been way oversold and are just plain cheap. But others have been prima donna stocks that people champion as no-brainer winners. Unfortunately, many of these companies have been high-priced with very high expectations that may not be met in an economic slowdown. Among these, the fiberoptic equipment suppliers have been one of the last refuges that are now getting smacked.

Among the semis, I think the concerns about a downturn are probably premature and many of the stocks look oversold. But the heavy selling among semi equip stocks, weakness in computer-related and wireless-related companies suggests others are betting differently. Unless the overall economy tanks, my best guess is that one of two scenarios play out:

1) A continuing semi boom with greater semicap expenditures. In this case, semi equip companies will boom as the industry goes into overcapacity followed by a crash.

2) Semi growth slowing with reduced semicap expenditures. In this case, semi equip companies take more of a hit but chip pricing remains stronger for a longer time period. This is more positive for chip companies.

I'm tentatively favoring the second scenario. I've sold off all semi equip holdings and most chip companies. I've been pruning my portfolio down to relatively few value techs that I think should do well on a valuation basis whether the semi cycle remains strong or a downturn is on the way.
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