Yes, something is very wrong with the economy: we're headed for a recession. The only question is whether it's mild like 1990, or WayUgly, like 1973. That's why, since January, I've been trading rather than investing.
In ancient times, when unexpected bad things happened (crops failing, wars, plague), people blamed the capricious Gods. Now, when ThingsGoWrong, we blame the Fed, the World Bank, or the IMF.
TXN's 5Y historical EPS growth rate in 22%, which is the same as the LT expected analyst consensus, and that seems reasonable to me. That growth rate will be resumed, after this recession. In 2001, they may only make 0.80. After that, earnings will jump back up to the previous trendline, maybe 1.40 in 2002. We have this buying opportunity now, because investors only pay attention to the next 6-12 months. At 29 TXN is at a reasonable, but not low, valuation.
Intel cutting capex will affect the semi-equips, I don't see any effect on TI. |
