Earlie, reality and mass psychology are not always congruent. I could make an even more long term bearish case for the semi-equip, based on Moore's law coming to an end in some 10 years or so. However, after the Nassacre, my bet is that the Sox will lead the run, and that has nothing to do with the fundamentals of the industry, it has to do with a process of "killing" excess liquidity, a slow and painful process that may still take few more years. To soak that excess liquidity in an environment where there is excess capacity (and thus inflation cannot soak those excesses), asset inflation, like paper assets, occurs from time to time. One reason I still hold that after the Nassacre, we'll get another run, and another debacle and then another run. A merry go round (g). Everyone is assuming that the next peak in the semi equip shipments will be in the $35/$40 B per year or even better. I don't agree with that, but "they" will prop the semi-equip prices to match these assumptions before the truth comes out. As for your shorts, I think that they are going to do quite fine in the next four to five weeks.
Zeev |
