This thread better wake up<G>
By: Michael Murphy....
Urgent Market Update, October 6, 2000
I'm writing to you today because it's time for a reality check. Technology is absolutely,
without question, the best place for you to invest your hard-earned money in the months
and years ahead. I want to make sure that you have the confidence to weather this current storm, stick to our game plan, and ultimately profit.
So let's run through what I'm hearing from company managements about the current business climate, as well as take a look at the industry fundamentals, and I'll show you why technology stocks ARE headed up, despite what you're hearing in the popular financial press:
Fact: Semiconductor equipment sales show NO signs of slowing down. In fact,the Semiconductor Equipment & Materials Institute just reported that equipment orders rose for the 18th straight month in August (which is normally a slow month) to over $3 billion--an all time record. Shipments rose 69% from a year ago. There is no slowdown!
Fact: The latest Semiconductor Industry Association data parallels the semiconductor
equipment data. August semiconductor sales were up 54% year over year. Three product lines more than doubled sales: flash memory,which Intel makes and Motorola uses in cell phones, DRAM memory and programmable logic devices. Optoelectronic chips (used in data communications systems) were up 88%, suggesting there's no slowdown at Cisco. Digital signal processors, where Texas Instruments leads, grew
55%. The Association said they are confident sales will be up 31% this year--no weakness here, either! Fact: Interactive Data Corp., the market research firm, just raised their estimate of PC growth this year from 17% to 18.5%. We are going to go from an installed base of 500 million PCs right now to 2.5 billion in five years. The PC is not even close to being dead!
Fact: Yes, Intel did announce that their September quarter revenues would only grow
3% to 5%. But the truth is that even if they come in at the lower end of that range, they
will be reporting record revenues, up 17% over last year's September period, and record earnings, up approximately 39%. Intel is a terrific company, and the stock will come back in the current quarter!
Fact: In short, chips, chip equipment, computers and communications are all doing fine. Asia is very strong, the U.S. market is good and Europe is a bit weak. That's the reality today--a far cry from Wall Street's nightmare of collapsing businesses and earnings
disappointments. |
