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Technology Stocks : Semi Equipment Analysis

SOXX 288.52

-0.3%

Nov 14 4:00 PM EST

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To: Donald Wennerstrom who wrote (33)	10/24/2000 4:10:03 AM
From: scott_jiminez	Read Replies (1) of 95420

Donald - once again I've chewed on your data. Here's some useless info my trusty stats program spewed out: 1. There's a +0.71 correlation between the Btb of this year and last (9 months). That's quite strong and suggests the seasonality thing is for real. This is promising since the Btb bottomed in September of last year. 2. There's a +0.99 correlation between the bookings of last year and those of this year (9 months). This means that the timing and rate of change in bookings is almost exactly the same this year versus last. This also reiterates part of the correlation found in #1 - that the rate of change in bookings slows down at the same time each year. This latter point is impressively borne out if you plot out all the bookings data (21 months) [bookings vs. month]: the resultant graph is almost a perfect sine wave centered around a line at 45 degrees from the origin (i.e. correlation coefficient = ~1). The sine wave is produced by periods of rapid bookings increases from ~October to March and then generally flat through September. While this year was stronger than flat in the spring/summer, the September number brought the pattern back in line. The data suggests bookings will increase on average at $104 mil/month if the current environment continues. The data also suggests that the next month or two may see flat bookings with a sharp spike up starting in December. Since the market tends to look 3-6 months in the future, these extrapolations (TO BE USED WITH EXTREME CAUTION) suggest stock prices in the sector are at or near a significant bottom.

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