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Technology Stocks : Semi Equipment Analysis
SOXX 312.76+1.1%4:00 PM EST
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To: The Ox who wrote (7034)11/22/2002 1:09:50 PM
From: Alastair McIntosh  Read Replies (1) of 95535
 
Hi Michael, my remarks while somewhat tongue in cheek reflect my views. Despite what I consider high valuations for the sector I am by no means bearish. I think investor sentiment and seasonality will dampen any pullback and share prices will generally trend higher into January. Just because stocks are over-valued does not mean that they won't become more over-valued.

It is my guess that we are setting up for a great shorting opportunity in January. Two more low BtB reports and lowered 2003 capital spending budgets should do the trick. Leading edge technology buys may keep the industry going at a low level but until overall capacity issues are resolved growth will remain anemic. It will take more than modest increases it IT spending to trigger capacity buys.

Until the larger economy works out issues of overcapacity, high debt and low overall demand companies will not be eager to spend on IT. The market is always looking ahead 9 to 12 months but that doesn't mean the market is right. The market "looked ahead" in the spring of 2001, the fall of 2001, in March of this year and in August of this year. Why is the market "right" now in predicting recovery when it has been wrong so often?

As far as any statements from CEO's, I think that it is best to ignore them. They are more self-serving than anything said by analysts.
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