The assumption here must be that a slowing economy will bring demand levels back down before supply can catch up.
Perhaps..but certainly not necessarily. The point of my last post is that we all should, in the future, take into account purely supply bottlenecks when calculating the characteristics of SEM cycle. If supply shortfalls are severe, as they appear to be at the moment, we should consider the possibility, if not the likelihood, that this fact alone could impact earnings nearly to the same degree as a crew cut on the demand side.
I've never been one for conspiracies and I've never been on the anti-analyst bandwagon either. I've always felt the individual investor, you and I, share at least as much guilt in the volatility of the markets as the big boys. This 'volatility' definitely includes the crash of the SEM stocks this year...where big and small investors alike have fled the SEMs for greener pastures.
It's been said before - we all despised what John Joseph said about the sector a couple months back. An analysts job, at its core, is to predict future performance of stock prices. A single or even a bunch of analysts cannot drive an entire sector for more than a very short period without some sort of connection to the fundamentals kicking in.
In the end, no matter what happens from here on out, John Joseph was right.
Some believe that analysts per sedrive stock valuations. I say they are one factor in a very large mix; to blame them for a consistent 6-9 month trend is more of a conspiracy theory than an objective analysis. I've no better idea than anyone else why the sector has come down so far, so fast. There is nothing in that previous sentence implying whatsoever that analysts are 'responsible' for this decline.
I just don't buy it. |
