Went to bed last night thinking, well, QCOM, SEBL, NTAP, SOX, NAZ...you name it...they are all on the cusp of breaking out again, just like they were a few days ago when I did my little bull turn...then they fell back...and I returned to my cave.
Well, this AM we got a strong "I'm so excited to be investing again" rally and are currently having second thoughts. NTAP appears to be holding up, but the rest are backsliding.
It will be interesting to see what happens by the end of this week. Employment numbers come out Friday. If I was doing anything at this point it would be to buy puts or short with VERY tight stops.
Went to the TRC annual meeting yesterday. Very interesting. Will report when I have some time later.
Good luck today everyone.
I think it is turning point time.
<H>
...and now a word from AMCC:
JPMorgan Tech Conference: Applied Micro Doesn't See
Any Second-Half Heroics for Tech
By Tish Williams
Senior Writer
5/1/01 9:51 PM ET
We didn't even have to buy the CFO of Applied Micro Circuits
(AMCC:Nasdaq - news) a beer.
Bill Bendush was more than graphic in describing the communications
equipment spending clampdown that sucker-punched his upcoming first
quarter results. Last week AMCC met Street fourth-quarter expectations, but
warned that revenue would fall 42% in the first quarter to follow. This week he
got to face the JPMorgan H&Q crowd. How bad is it, Bill?
It's really (insert your expletive here) bad. Let him
count the ways:
The inventory buildup among AMCC's key
communications customers has cut business to
zero. Forget about order delays. "We don't have
any backlog. How many more orders can they cancel?!" Bendush
deadpanned about his empty nest. Bendush says business cut out halfway
through the last quarter -- enough so that he's got his marketing team to go
back to mid-1999 revenue levels, draw a straight line to the first-quarter
forecast and calculate growth levels. The Street is going to have to acclimate
itself to growth in the high teens vs. those spectacular high-30%
performances from 2000.
This could take some getting used to.
And no, price pressure will have nothing to do with it. If only AMCC was that
lucky. "To date I have not seen any pricing requests from customers, any
pricing pressure. Maybe that's because they're not placing any orders," he
said.
Enough inventory madness! When does he expect his customers to work
through what they've got and buy products again? Four to six months, he
says, using internal numbers put together six weeks ago. The trouble there is
that in those six weeks, Bendush's gut tells him that number has stayed the
same. "It feels to me like it's probably the same thing," he says. That's four to
six months of inventory, starting now. "We're not making any breathing room."
Many of those design wins from last year just may not get made, after all.
So how can this be the bottom? Bendush admits that AMCC's estimates that
June will be the bottom are culled from nothing but anecdotes and the words
of Street-doubted customers such as Nortel (NT:NYSE - news). "I believe
June will be the bottom, but we're not expecting great things in September,"
he says
In other words, he's got no visibility, which he translates as "another way of
saying 'poor orders.'"
No second-half 2001 comeback here. It's time for that beer. |
