Dave, I am long the stocks that could benefit from the PC ugrade cycle. That includes Microsoft, Intel, AMD, Dell, MU.
Any part of the semiconductor group that has a high PC related focus. The recovery is 6 months from now.
Wireless would be second group but the recovery will probably be at least 1 quarter after the PCs. While corporations may put major expenditures on hold, buying PCs and software is a lot easier decision for them.
Windows XP launch end of October has been noted as the next PC upgrade cycle after the lead to Y2K.
New O/S is not going to run as efficiently on old machines.
Of course, that could mean we have delayed buying decisions in the meantime...and that may not really be due to only the economic conditions over the coming months. There is a tendency to hold back purchases ahead of a major operating system upgrade out of MSFT. This one is a biggie!
Whereas in telco, it is just overcapacity that keeps carriers from spending, in computers...it could turn out to be just seasonal factors as Intel stated...or maybe typical patterns before the new Windows launch.
I would note that Intel is going to finally start selling more P4s as there may finally some justification to buy it. In the meantime, Intel is working on efficiency.
I prefer MSFT over the others.
About getting cautious:
It is quite simple. I expected the market to move up fast because I felt we had seen capitulation in tech stocks by end of March. I thought we had seen it in mutual fund holders as well....as many rushed out of tech, to diversify with bond or energy funds.<g>
At this point, the buyers are patient and so are the short sellers. They don't really want to cover. Naz short interest is at very high levels but there does not appear to be panic yet. These seem to be strong forces and neither side is aggressive. Maybe the buyers will get more aggressive as we exit warnings season.
There is more and more doubt about any recovery soon. As the doubt increases, it may become a self fullfulling prophecy....starting with investors and then leading to mainsteet. It is just the additional risk.
When I say cautious, I mean not expecting any momentum to pick up. I still think we can have an explosive move in the Nasdaq..supply/demand of stocks that I noted before.
I would say the odds of a move over 2500 are much better than a move below 2000. Now I am just acknowledging that there is a chance the market can break 2000, temporarily, even with the "Greenspan put".
JMHO. |
