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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Jack of All Trades who wrote (104308)5/23/2001 4:58:17 PM
From: pater tenebrarum  Read Replies (8) of 436258
 
note: the semi equipment makers as a group still trade at impossible multiples to book value considering the size of the downturn. at past cycle bottoms you could buy them at 1 times book....right now they trade at 5 to 6 times book. and i think the size and scope of the current downturn is generally underestimated. the world is simply DROWNING in semiconductor manufacturing capacity, which has expanded by 2,500% over the past decade. the demand forecasts for cellular phones, PC's, routers, switches,what have you, have been revised downward by astonishing rates (not really, since the original forecasts were nothing short of insane) and the revisions still don't capture the size of it. i think this downturn is different from the most recent cycles inasmuch as it is secular in nature. yes, there will be periods of relief, but the recent buyers of the stocks are frankly deluding themselves.

remember, one times book value...that's the rule of thumb. it means there's still a long way to go.
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