I've never owned MU, and never will. But I follow it, because it's a bellwether (= noisy male goat; not sure of the symbolism there) for the semi and semi-equip sectors.
So many, many people want to time the upturn in this sector, and remember the 10-bagger for AMAT longs in the last upcycle. They are eager to buy, and have been waiting, fingers poised over the Buy Button, for the signal that TheBottomIsIn, and the SectorIsSafe again. And this (bookings upturn) may be taken as THE signal.
Now, that 10-bagger won't happen again, it can't. A 10-bagger from the 2001 lows implies a highly-unlikely PE and E, (or an equally-unlikely P/S and S). But Momentum Money doesn't pay attention to those numbers. They don't believe the theory that there is a mathematical connection between E, PE, and stock price, and that those numbers have any limits. Never have in any other upturn, no reason to expect them to, this time around. Valuation is only a topic for discussion, after the cycle top. Well after, starting when the stocks are about 50% off their highs. Until then, it's off to the races, and the earliest in gets richest quickest, and the sky's the limit. Or at least that's what happened after the 1996 and 1998 bookings upturn, so I won't be shorting into it, no matter how silly the valuation is.
Aside: Fleck started looking smart, when the Bear Market started. And he will continue looking smart (is past tense appropriate, here?), for exactly as long as the Bear Market lasts. |
