Brian, reading more of Fitzgeralds take:
>Investors "don't want to miss the three- to five-fold return," says Fitzgerald. "It's 20 years of learned behavior." That behavior won't work, not for the next several years at least. "Unfortunately," he says, "most investors haven't adjusted their thinking."
Stocks of many chip makers and semiconductor-equipment manufacturers are indeed at or near bottom he believes. But, he concludes, so what?
Look at demand: For 15 years or more, the personal computer was the chip industry's prime driver. The PC boom started in the mid-1980s and reached its peak a couple years ago; now it's flatlining, and a return to previous growth rates is unlikely, bordering on impossible. The next biggest market is communications; growth there might return, but with overcapacity so gross, it will be a long time coming. Add PCs and their peripherals to communications chips, Fitzgerald says, and you get 70% of semiconductor revenue. "I don't see demand rising for most of the sector," he says. He projects industry growth at 5% to 10%, several years out.<
That sounds as if he knows, but how can he? How can he see several years out?
I can't either, of course. Worse than no advice is false advice spoken with great conviction.
Gottfried |
