People will claim, hubris ad nauseum, that x, y, and z will be present at the bottom of the equipment cycle. If these factors don't fall into place roughly approximating these preconceived ideas of a cycle bottom, then the bottom 'by definition' has not occurred. If such were the case, and definitions of cycles were so easy, we REALLY would all be millionaires.
Some might claim, reasonably it would seem, that in early December when a majority of the equipment stocks were down 70%, many over 80%, that the blood oozing was substantially more than a trickle. Some might claim, reasonably it would seem, that when virtually every company has warned, some twice, of dramatically lower revenue, that the 'trickle' was clotting in the streets. Some might claim, reasonably it would seem, that when virtually every analyst has reduced their estimates for virtually every equipment stock, some twice, that the source of the 'trickle' was in need of a transfusion.
In other words, the companies and investors have been spilling TONS of blood and pundits long ago bailed the sector. Klic for example: 1. At its nadir in early December, the stock had lost 80% (since March); 2. The company announced layoffs in November; 3. Including one time (acquisition) charges, the company had a loss in q1, FY2001; 4. The stock was rated a consensus strong buy in ~ June, 2000 and had 80% institutional investment. The stock is currently rated a low hold (Zack's = 2.8) and institutional investment is down to 45%.
And, making a prudent assumption, Klic is the rule, not the exception.
BLOOD.
Perhaps we're not at the precise turning point at the moment but we're damn close. Institutional investment has already begun to climb again for Klic and the stock just received some upgrades.
My experience with this thread is to gather the majority opinion, especially the more strident claims (i.e. 'trickle'), and invest the opposite. |
