Gottfried, Thanks for your thoughts on that. FWIW, on CNBC Market Week tonight, the hot tech fund manager Kevin McKechnie (Pimco Global Innovation Fund) picked AMAT as his "play of the week". These are supposed to be long term picks, not just weekly ones (per explanation from Maria on a recent show), but they sort of grade the panelists by how these picks perform weekly. He says AMAT will have disastrous earnings Tuesday, and expects bookings to be down 30%, and "that is as bad as it typically gets for AMAT, and leads to a bottom in the stock".
Maybe he has not been studying the charts like we have. Wish I knew whether to buy in before or after the earnings release. The pattern lately has been big selloffs on negative guidance, maybe it is in the stock though here. I have a feeling that we will get a lot of movement one way or the other following the earnings release. Another factor is that many are starting to question a significant second half recovery. What is your guess?, we go up or down after earnings release? Anyone else reading this have thoughts on this?
If you are right that AMAT comes back (to the high) in two years, then I am upgrading now to a strong buy (corresponds to about a 65% annual return). That argues for buying ahead of earnings I guess.
I am glad you agree with me on the Nikkei analogy. There is a real interesting article I came across a while ago which states that in the markets we, as humans, tend to go too far with our pattern recognition skills, and that gets us into trouble as investors. Interesting. Maybe that is how that superbowl theory came about. They argue that market behavior tends to be more random than we like to realize. One last thought, is it just me, or do things seem more negative now then ever for the tech stocks? If so, might we have seen the bottom for the Naz back in early January? That is one pattern that I think will stand the test of time - lots of bears at the bottoms. In fact things seem so negative, it is "unbearable".
Regards,
John |
