Thoughts on your excellent charts:
1. bookings are now in the general range where they bottomed in the 1996 and 1998 downturns.
2. in those two previous downturns, bookings and billings both bottomed within a couple of months of each other, and at about the same level. If the same pattern holds, then billings have to go to 1.0-0.5B before they turn up, in the current downturn.
3. billings going from 3B to 0.5B, in the space of 6-8 months, with nobody anticipating it, means every company in the semi-equip industry is oversized (for current demand).
4. unless we get a sharp rebound in orders off a bottom that happens soon, the entire industry needs to downsize a lot more than they've already done.
5. current stock prices are anticipating a bottom in orders, and sharp rebound, in the next 2-3 months.
6. I will be watching very closely, to see whether I need to switch my shortterm trading from long back to short. If conditions for semi companies don't improve in the next 3 months, short will (agian) be the way to make money.
7. at current prices, I won't take any longterm positions, even if it looks like I've missed the bottom. Asset prices already have most of the next upturn priced into them. |
