More troubles ahead?
From Fleckenstein's market rap: siliconinvestor.com
Gimme shelter. . . The bigger tech stocks, especially the PC-related ones, were largely able to escape this morning's pressure. Apparently the (ridiculous) thinking is that maybe they are already down enough and should be considered cheap at these levels.
First of all, they are not cheap on present day earnings, especially relative to their growth rates, which have been slowing in the last year. More importantly, the fourth quarter is going to be an abject disaster for PC stocks and PC component suppliers. That is why DRAMs are now trading in the threes -- that's right, the threes. You haven't heard Maria mention them since they had an eight-handle on them.
EEEEk!. . . Last night, E-machines (EEEE), the number-three seller of consumer PCs, talked about broad-based weakness across all PC price points and all retail channels (naturally, there were only three analysts on the conference call, since the stock has dropped from $8 to $1). Of course, we got a whiff of that weakness when we saw the recent IDC numbers for Dell (DELL). And we know what Gateway's (GTW) numbers were like. That's probably why the rumors about Hewlett-Packard (HWP) have some validity. The biggest likely disaster candidates in this area are Compaq (CPQ), Intel (INTC), Gateway, Dell and even Micron (MU) still.
I would like to repeat that the fourth quarter will be an abject disaster for PC sales and for the suppliers, including Intel. Intel will not make the numbers -- in fact, it is only a matter of time before the company is forced to preannounce. It is 100-percent cooked, in my opinion.
Hm ... the possible impact of another INTC crash on AMD is not a nice vision (nor is that of a slowing PC market).
ABurner |
