re: "The current pervasive negative sentiment "
What negativism? AMAT, NVLS, KLAC are currently at multiples (P/S, P/B) that (aside from the 2000 mania top) correspond to previous cycle top valuations, not cycle bottoms. These stocks have nearly doubled off their lows, and most investors seem convinced that the bottom is in, and a new upcycle has begun. No, they will admit, there is no concrete evidence of increased orders, firming chip ASPs, firming demand, etc., but everyone seems convinced we'll see those things in the next few months. Greenspan says today that consumer spending and worker productivity will hold up, and we'll avoid both recession and inflation. Most investors seem to agree with him, which is why the Dow is near an alltime high, and the SOX is up 50% off its lows. I don't see much negativism at all. I see a suddenly pervasive euphoria, a consensus around the most optimistic possible future. I see a partial return to the attitudes that prevailed during 1999, just in the last 6 weeks. And that change in sentiment is not at all supported by any change in the fundamentals. |
