Cary, Following is the latest 7 weeks DW data and a Barron's article.
What is your, Lizzie, and other threaders, opinions regarding the
article?
My question, "Will China become the Capitalistic Center of the
World in the future based on the attributes you have set out".
Paul
Changes Changes Changes Changes Changes Changes Changes
11/05/02 11/12/02 11/19/02 11/26/02 12/3/02 12/10/02 12/17/02
10week 52 10week 46 10week 58 10week 70 10week 69 10week 68 10week 60
30nyse 24 30nyse 24 30nyse 26 30nyse 34 30nyse 34 30nyse 34 30nyse 38
30OTC 30 30OTC 30 30OTC 34 30OTC 45 30OTC 46 30OTC 41 30OTC 38
bpaero 36 bpaero 46 bpaero 46 bpaero 52 bpaero 52 bpaero 49 bpaero 44
bpauto 36 bpauto 40 bpauto 40 bpauto 42 bpauto 46 bpauto 46 bpauto 46
bpbank 52 bpbank 52 bpbank 54 bpbank 58 bpbank 60 bpbank 60 bpbank 60
bpbiom 36 bpbiom 36 bpbiom 40 bpbiom 44 bpbiom 44 bpbiom 44 bpbiom 44
bpbuil 38 bpbuil 40 bpbuil 42 bpbuil 54 bpbuil 54 bpbuil 50 bpbuil 54
bpbusi 38 bpbusi 38 bpbusi 42 bpbusi 48 bpbusi 50 bpbusi 52 bpbusi 52
bpchem 36 bpchem 42 bpchem 42 bpchem 42 bpchem 48 bpchem 49 bpchem 48
BPCOMP 32 BPCOMP 34 BPCOMP 36 BPCOMP 44 BPCOMP 48 BPCOMP 45 BPCOMP 42
bpdrug 42 bpdrug 44 bpdrug 46 bpdrug 50 bpdrug 52 bpdrug 50 bpdrug 46
bpelec 30 bpelec 32 bpelec 36 bpelec 46 bpelec 48 bpelec 49 bpelec 50
bpeuro bpeuro bpeuro bpeuro bpeuro bpeuro bpeuro
bpeuti 38 bpeuti 40 bpeuti 44 bpeuti 50 bpeuti 50 bpeuti 51 bpeuti 58
bpfina 42 bpfina 42 bpfina 44 bpfina 52 bpfina 54 bpfina 54 bpfina 56
bpfood 46 bpfood 46 bpfood 46 bpfood 46 bpfood 46 bpfood 45 bpfood 46
bpfore 22 bpfore 24 bpfore 26 bpfore 42 bpfore 54 bpfore 56 bpfore 56
bpgame 42 bpgame 42 bpgame 44 bpgame 48 bpgame 56 bpgame 55 bpgame 46
bpguti 32 bpguti 38 bpguti 38 bpguti 42 bpguti 42 bpguti 41 bpguti 44
bpheal 32 bpheal 34 bpheal 36 bpheal 38 bpheal 40 bpheal 40 bpheal 40
bphous 34 bphous 36 bphous 42 bphous 44 bphous 46 bphous 46 bphous 50
bpinet 22 bpinet 22 bpinet 26 bpinet 32 bpinet 32 bpinet 31 bpinet 32
bpinsu 36 bpinsu 36 bpinsu 36 bpinsu 42 bpinsu 44 bpinsu 43 bpinsu 44
bplati 18 bplati 18 bplati 14 bplati 20 bplati 22 bplati 21 bplati 24
bpleis 36 bpleis 38 bpleis 38 bpleis 44 bpleis 46 bpleis 46 bpleis 46
bpmach 36 bpmach 40 bpmach 42 bpmach 52 bpmach 52 bpmach 52 bpmach 52
bpmedi 50 bpmedi 52 bpmedi 52 bpmedi 58 bpmedi 62 bpmedi 60 bpmedi 54
bpmeta 32 bpmeta 38 bpmeta 40 bpmeta 42 bpmeta 54 bpmeta 54 bpmeta 56
bpnyse 38 bpnyse 40 bpnyse 40 bpnyse 48 bpnyse 50 bpnyse 50 bpnyse 50
bpoil 38 bpoil 40 bpoil 44 bpoil 40 bpoil 40 bpoil 45 bpoil 50
bpoils 44 bpoils 44 bpoils 44 bpoils 48 bpoils 52 bpoils 52 bpoils 56
bpopti 42 bpopti 42 bpopti 44 bpopti 54 bpopti 56 bpopti 54 bpopti 56
bpotc 36 bpotc 38 bpotc 40 bpotc 46 bpotc 48 bpotc 47 bpotc 48
bpprec 42 bpprec 42 bpprec 42 bpprec 42 bpprec 42 bpprec 50 bpprec 70
bpprot 38 bpprot 38 bpprot 30 bpprot 36 bpprot 36 bpprot 40 bpprot 40
bpreal 46 bpreal 46 bpreal 46 bpreal 46 bpreal 46 bpreal 46 bpreal 46
bprest 32 bprest 32 bprest 32 bprest 42 bprest 42 bprest 39 bprest 42
bpreta 36 bpreta 40 bpreta 40 bpreta 46 bpreta 52 bpreta 50 bpreta 44
bpsavi 68 bpsavi 68 bpsavi 68 bpsavi 68 bpsavi 72 bpsavi 68 bpsavi 68
BPSEMI 54 BPSEMI 56 BPSEMI 56 BPSEMI 72 BPSEMI 74 BPSEMI 64 BPSEMI 58
bpsoft 32 bpsoft 34 bpsoft 38 bpsoft 46 bpsoft 50 bpsoft 47 bpsoft 44
bpstee 22 bpstee 22 bpstee 22 bpstee 24 bpstee 28 bpstee 28 bpstee 34
BPTELE 28 BPTELE 30 BPTELE 32 BPTELE 42 BPTELE 44 BPTELE 44 BPTELE 44
bptext 32 bptext 32 bptext 36 bptext 40 bptext 40 bptext 41 bptext 42
bptran 46 bptran 48 bptran 54 bptran 56 bptran 56 bptran 58 bptran 58
bpwall 38 bpwall 40 bpwall 42 bpwall 64 bpwall 64 bpwall 58 bpwall 58
bpwast 40 bpwast 40 bpwast 48 bpwast 58 bpwast 58 bpwast 57 bpwast 58
HLnyse 32 HLnyse 40 HLnyse 40 HLnyse 50 HLnyse 61 HLnyse 64 HLnyse 58
HLotc 46 HLotc 58 HLotc 58 HLotc 64 HLotc 74 HLotc 76 HLotc 60
twotc 63 twotc 56 twotc 66 twotc 76 twotc 76 twotc 68 twotc 56
Changes Changes Changes Changes Changes Changes Changes
11/05/02 11/12/02 11/19/02 11/26/02 12/3/02 12/10/02 12/10/02
bpeuro 0 bpeuro bpeuro bpeuro bpeuro bpeuro bpeuro
bpsavi 68 bpsavi 68 bpsavi 68 twotc 76 twotc 76 HLotc 76 bpprec 70
twotc 63 HLotc 58 twotc 66 BPSEMI 72 HLotc 74 twotc 68 bpsavi 68
BPSEMI 54 twotc 56 HLotc 58 10week 70 BPSEMI 74 bpsavi 68 HLotc 60
bpbank 52 BPSEMI 56 10week 58 bpsavi 68 bpotc 74 10week 68 bpbank 60
10week 52 bpmedi 52 BPSEMI 56 HLotc 64 bpsavi 72 HLnyse 64 10week 60
bpmedi 50 bpbank 52 bptran 54 bpwall 64 10week 69 BPSEMI 64 HLnyse 58
HLotc 46 bptran 48 bpbank 54 bpwast 58 bpwall 64 bpmedi 60 bpwast 58
bptran 46 bpreal 46 bpmedi 52 bpmedi 58 bpmedi 62 bpbank 60 bpwall 58
bpreal 46 bpfood 46 bpwast 48 bpbank 58 HLnyse 61 bpwall 58 bptran 58
bpfood 46 bpaero 46 bpreal 46 bptran 56 bpbank 60 bptran 58 BPSEMI 58
bpoils 44 10week 46 bpfood 46 bpopti 54 bpwast 58 bpwast 57 bpeuti 58
bpprec 42 bpoils 44 bpdrug 46 bpbuil 54 bptran 56 bpfore 56 twotc 56
bpopti 42 bpdrug 44 bpaero 46 bpmach 52 bpopti 56 bpgame 55 bpopti 56
bpgame 42 bpprec 42 bpopti 44 bpfina 52 bpgame 56 bpopti 54 bpoils 56
bpfina 42 bpopti 42 bpoils 44 bpaero 52 bpmeta 54 bpmeta 54 bpmeta 56
bpdrug 42 bpgame 42 bpoil 44 HLnyse 50 bpfore 54 bpfina 54 bpfore 56
bpwast 40 bpfina 42 bpgame 44 bpeuti 50 bpfina 54 bpoils 52 bpfina 56
bpwall 38 bpchem 42 bpfina 44 bpdrug 50 bpbuil 54 bpmach 52 bpmedi 54
bpprot 38 HLnyse 40 bpeuti 44 bpoils 48 bpreta 52 bpbusi 52 bpbuil 54
bpoil 38 bpwast 40 bpwall 42 bpnyse 48 bpoils 52 bpeuti 51 bpmach 52
bpnyse 38 bpwall 40 bpprec 42 bpgame 48 bpmach 52 bpprec 50 bpbusi 52
bpeuti 38 bpreta 40 bpmach 42 bpbusi 48 bpdrug 52 bpnyse 50 bpoil 50
bpbusi 38 bpoil 40 bphous 42 bpsoft 46 bpaero 52 bpdrug 50 bpnyse 50
bpbuil 38 bpnyse 40 bpchem 42 bpreta 46 bpsoft 50 bpbuil 50 bphous 50
bpreta 36 bpmach 40 bpbusi 42 bpreal 46 bpnyse 50 bpreta 50 bpelec 50
bpotc 36 bpeuti 40 bpbuil 42 bpotc 46 bpeuti 50 bpelec 49 bpotc 48
bpmach 36 bpbuil 40 HLnyse 40 bpfood 46 bpbusi 50 bpchem 49 bpchem 48
bpleis 36 bpauto 40 bpreta 40 bpelec 46 bpelec 48 bpaero 49 bpreal 46
bpinsu 36 bpprot 38 bpotc 40 30OTC 45 BPCOMP 48 bpsoft 47 bpleis 46
bpchem 36 bpotc 38 bpnyse 40 bpleis 44 bpchem 48 bpotc 47 bpgame 46
bpbiom 36 bpmeta 38 bpmeta 40 bphous 44 30OTC 46 bpreal 46 bpfood 46
bpauto 36 bpleis 38 bpbiom 40 BPCOMP 44 bpreal 46 bpleis 46 bpdrug 46
bpaero 36 bpguti 38 bpauto 40 bpbiom 44 bpleis 46 bphous 46 bpauto 46
bphous 34 bpbusi 38 bpsoft 38 BPTELE 42 bphous 46 bpauto 46 BPTELE 44
HLnyse 32 bpinsu 36 bpleis 38 bprest 42 bpfood 46 bpoil 45 bpsoft 44
bptext 32 bphous 36 bpguti 38 bpprec 42 bpauto 46 bpfood 45 bpreta 44
bpsoft 32 bpbiom 36 bptext 36 bpmeta 42 BPTELE 44 BPCOMP 45 bpinsu 44
bprest 32 bpsoft 34 bpinsu 36 bpinsu 42 bpinsu 44 BPTELE 44 bpguti 44
bpmeta 32 bpheal 34 bpheal 36 bpguti 42 bpbiom 44 bpbiom 44 bpbiom 44
bpheal 32 BPCOMP 34 bpelec 36 bpfore 42 bprest 42 bpinsu 43 bpaero 44
bpguti 32 bptext 32 BPCOMP 36 bpchem 42 bpprec 42 bptext 41 bptext 42
BPCOMP 32 bprest 32 30OTC 34 bpauto 42 bpguti 42 bpguti 41 bprest 42
bpelec 30 bpelec 32 BPTELE 32 bptext 40 bptext 40 30OTC 41 BPCOMP 42
30OTC 30 BPTELE 30 bprest 32 bpoil 40 bpoil 40 bpprot 40 bpprot 40
BPTELE 28 30OTC 30 bpprot 30 bpheal 38 bpheal 40 bpheal 40 bpheal 40
30nyse 24 bpfore 24 bpinet 26 bpprot 36 bpprot 36 bprest 39 30OTC 38
bpstee 22 30nyse 24 bpfore 26 30nyse 34 30nyse 34 30nyse 34 30nyse 38
bpinet 22 bpstee 22 30nyse 26 bpinet 32 bpinet 32 bpinet 31 bpstee 34
bpfore 22 bpinet 22 bpstee 22 bpstee 24 bpstee 28 bpstee 28 bpinet 32
bplati 18 bplati 18 bplati 14 bplati 20 bplati 22 bplati 21 bplati 24
BPALL38.1 BPALL39 BPALL40.3 BPALL45.8 BPALL 49.2 BPALL BPALL
20bonds 102.89 20bonds 102.89 20bonds 102.77 20bonds 103.46 20bonds 103.22 20bonds 103.18 20bonds 103.31
Paul
Make sure you sit down to read this one.
Jeff Steiner
Portfolio Manager
U.S. Bancorp Private Asset Management
Investment products offered or advised by U.S. Bancorp Asset Management,
Inc.:
------------------------------------------------------------------------------------------------
Not FDIC Insured * No Bank Guarantee * May Lose Value
------------------------------------------------------------------------------------------------
-- BARRON'S: Up & Down Wall Street --
Down But Dangerous
By Rhonda Brammer
P-s-s-s-t. don't tell anyone, and certainly don't tell anyone we told you
--
but Fred Hickey loves high-tech.
Honest. Yes, the same Fred Hickey who has been bearish as all get-out on
the
whole darn sector for four long years. In fact, Fred Hickey has been in
love
with high-tech since his college days back in the late 'Seventies.
Fresh out of Notre Dame, he scraped together enough dough to buy a few
shares
of Wang Labs, zeroing in on Wang because he had grown up in Lowell, Mass.,
Wang's corporate headquarters, and had watched his hometown, a blown-out
industrial area with one of the highest unemployment rates in the country,
magically transformed by the influx of high-tech outfits such as Wang and,
just
down the road, Prime Computer. In a mere 12 months, his Wang shares
tripled.
He bought Prime and it almost quadrupled.
"I mean," he says, recalling his astonishment, "I kept thinking, this
could be
a really good thing."
While putting his accounting degree to work, first for Fannie Farmer and
then
traveling the world and climbing the managerial ranks at GTE, he kept
buying and
selling technology stocks -- his enthusiasm fired by how a small
investment,
like his stake in Software Publishing, could soar 10-fold.
All the while he chronicled his activities in an investment letter, first
for
family and friends, and then for a growing number of outsiders. Finally, in
1992, Fred decided to devote full time to his newsletter, the High-Tech
Strategist, which he writes far from the madding crowd in Nashua, N.H.
Among his subscribers, all garnered by word of mouth, he numbers some of
the
most sophisticated professionals on Wall Street as well as in techland --
readers who pay $120 a year to get his savvy and often contrarian slant on
high-tech.
Like the following from his February 2000 letter:
"Investors are throwing billions upon billions of their hard-earned
dollars at
tech stocks at ridiculously unsustainable prices and at Internet companies
with
dubious prospects. Wall Street's brokerage houses and mutual funds and many
company insiders are . . . egging on the ignorant masses to certain
financial
ruin, but enriching themselves in the process."
Ah, if only the fellow were willing to speak his mind!
And to Fred's great credit, since then he has resolutely refused to be
faked
out by any of the bounces, widely -- and wrongly -- hailed as "bottoms."
Moreover, he's still bearish.
Computers are what drive high-tech, Fred observes. All by themselves,
that's
where some 40% of semiconductor chips wind up. And the pure and simple
truth is
that demand for PCs "stinks."
Don't take his word for it, he urges. Pay heed, rather, to what the two
biggest computer distributors, with combined sales of some $40 billion, are
saying. Ingram Micro recently pegged sales at the low end of its forecast,
while
Tech Data slashed its revenue estimate for the quarter by 8%, blaming a
sharp
falloff in sales in late October and November.
As further exhibits in his bearish case, Fred cites the November slowdown
in
PC sales at electronics retailer Circuit City, and that its bigger rival,
Best
Buy, in its preliminary third-quarter release, disclosed that same-store
sales
actually slipped, fingering "weakness in sales of desktop computers."
So it hardly comes under the heading of "surprise" he's dead certain that
investors who have been wildly chasing tech stocks in the recent eight-week
rally are in for a rude awakening: "All the companies that are selling PCs
and
computer products, all of them, are seeing a deterioration in sales."
But, we gently reminded him, makers of microprocessors like Intel and
Applied
Micro Devices, not to mention manufacturers of disk drives and other
component
makers, have been more upbeat of late.
Fred shrugs. The big hitch is that these companies are planning for a
decent
volume of consumer demand for PCs, and so far, at least, such demand has
been
conspicuously absent, nor is there any indication it's about to suddenly
materialize.
What we're in for, in his melancholy view, is a replay of the fourth
quarter
of 2001, when, you may remember, good news from the likes of Intel, AMD and
Taiwanese component makers didn't mean diddly squat because end-demand was
crummy and stayed so. All the hoopla turned out to signify nothing but a
decidedly involuntary buildup in inventory.
What's more, the current spate of inventory building isn't limited to
PCs.
It's happening -- and in spades -- in cell phones.
While for several months now, flash-memory chips for cell phones have
been one
of the few bright spots for semiconductor makers, that's strictly a
fake-out.
The sad truth is that the cell-phone makers, desperately jockeying for
market
share, have all made big bets on a new generation of phones, hoping that
features such as cameras, new color screens and added Internet capabilities
will
transform the old standby cell into a hot Christmas item.
Alas, they're grasping at the proverbial straws. Most people who want
cell
phones -- be it in Europe, Japan or the U.S. -- already have them. And the
new
bells and whistles just aren't that compelling. Who really is hot to cruise
the
Internet on that itsy-bitsy screen? A recent Wachovia Securities survey,
which
covered the U.S., Europe and South Korea, concluded the demand for
replacement
phones "appears to have dropped as precipitously as it did this time last
year,
which presaged a weaker-than-expected Christmas season."
In the first half of next year, Fred's looking for an inventory
correction in
mobile phones that's even sharper than the one he foresees in PCs. Which is
bad
news, to put it mildly, for chip makers. For besides the aforementioned 40%
of
their output that goes into PCs, 20% or so ends up in mobile phones. We
hate to
pile on, but perhaps it's worth noting that a heap of semiconductors also
goes
into autos, sales of which are fast running out of gas.
That the Philadelphia semiconductor index soared 80% in eight weeks is
evidence of revived stock market mania, not a pickup in fundamentals. Fred
expects demand for chips to really hit the skids next year. Meanwhile,
overcapacity in the industry remains positively awesome.
Taiwan Semiconductor, UMC and Chartered Semi, which boast some of the
world's
most efficient foundries, have been gaining market share because other chip
makers outsource to them. But, in what is supposed to be the year's
seasonally
strongest quarter, they're running at only 30%-60% of capacity.
According to Steve Sanghi, chief exec of Microchip Technology, a maker of
microcontrollers, there are no fewer than 59 semiconductor fabs up for sale
worldwide. And Sanghi should know because he just bought one from Fujitsu
-- a
factory in Gresham, Ore., that was in "pristine" condition and replete with
$2
billion of equipment. The price tag -- an incredible $183 million. Man,
talk
about fire sales!
Yet even now, with fabs around the globe shuttered, new chip capacity is
still
pouring into the market from the Chinese, the Taiwanese and Western
semiconductor makers such as Intel, which just spent billions on three new
mega
fabs.
Intel, as it happens, rates among Fred's favorite shorts. Maybe we ought
to
interrupt here to note that without changing his basic bearish stance, Fred
has
opportunistically traded the bounces -- in July and again in October -- by
covering his shorts, selling his puts (he prefers long-term puts to
shorting)
and going long a handful of small-caps such as Rational Software (recently
acquired by IBM) and Lawson Software.
But right now he owns nary a tech stock.
No matter that at $17 and change, Intel is down 75% from its high. The
company, as noted a graf or two above, has spent billions on a trio of
monster
plants, and yet can't keep its older factories running full steam. This
overcapacity, combined with a glut of unsold PCs in the channel, is sure,
in
Fred's gentle phrase, to "kill first-half results."
In its glory years, from '88 to '96 -- when the PC market was booming and
Intel was increasing sales 30%-40% a year -- the stock commanded an average
P/E
that ranged from 10.7 to 14.2. During that span, the stock often sold
between
one and two times sales. But today, even though growth is at a standstill,
the
shares fetch 4.5 times sales, 36 times this year's estimated net and 28
times
next year's projection.
Intel's estimated revenues for the first quarter of 2003 barely match
those in
the first quarter of 1997. And anticipated earnings per share are half what
they
were six years ago. If Intel sold at twice sales and 15 times next year's
estimate -- a higher multiple than it sported when demand for chips was
blazing
-- the stock would be trading a cool 50% lower.
Everyone's just wild about Dell Computer, for all the obvious reasons:
solid
growth in a sorry business, keen efficiency and great marketing. Fred, too,
thinks the company "is absolutely the best," but he also thinks it's a
superb
short. Sure, nine-month sales climbed 11% and net, 15% -- but at $27,
shares are
selling for 34 times estimated earnings for this fiscal year, ending
January,
and 28 times next year's forecast. Not to mention, at 15 times book value.
"That's too high for an industry that is sinking," Fred asserts. At the
right
price, he would be lining up to buy the stock. But the right price, he
reckons,
is about 10 times earnings, which works out to $9 and change.
He has been short Nokia, the world's largest mobile-phone maker, which
only
last week lowered its sales forecast, glumly conceding that its snazzy new
phones weren't taking consumers by storm. And weak business at Nokia
suggests
the handwriting is on the wall for Texas Instruments -- whose largest
customer
is Nokia. TI's only pocket of strength, Fred relates, is in orders for
chips
that go into cell phones.
Estimates are that the company will earn 19 cents a share this year and
32
cents next. Balderdash, in Fred's view: "Only those who do not see an
inventory
problem are saying 32 cents." Around 17, Texas Instruments is selling at
three
times tangible book, 3.6 times sales and 53 times next year's bullish
estimate.
"I think," he says, with his characteristic understatement, "that's
insane."
With foundries gathering dust and chip makers slashing capital spending,
the
prospects for chip-equipment companies, even the best of them, are
somewhere
between awful and terrible.
Applied Materials, the world's largest maker of wafer-fabrication
equipment,
is laying people off. New orders fell 12% last quarter, but they would have
declined far more sharply without a big boost from producers of DDR DRAMs,
who
were feeling flush because of a temporarily tight supply of their new
generation
of memory chip. However, DDR prices have started to fall, from $9 to
$6-plus, a
drop destined to crimp Applied's orders and its skimpy earnings.
In fiscal 2002, ended October, on 30% lower sales, Applied earned 16
cents a
share, down from 48 cents the year before. The consensus for October 2003
is 20
cents.
So at $14, the stock is going for three times book, almost five times
sales
and 70 times earnings. In contrast, at the trough in 1998, the stock sold
at
twice sales; in 1996, it fetched less than one times. To Fred, five times
sales
translates into a lot of room on the downside.
On that score, at a more modest two times revenues, Applied Materials
shares
would sell at . . . $6.
The long and short of it is that the world still can't kick its mad
infatuation with tech stocks. Until it does, don't waste your time
searching for
a bottom. |
