Hi Don,
We had two supportive events for the market this week. On Tuesday the Fed reiterated its low interest rates pledge. And on Thursday new claims were under 400,000. As you noted, the market's response was a measly 3% rise. But really, even though it seems small, a few more weeks like this, and NASDAQ 2050 will join us for Thanksgiving dinner. Though, the shorts will not be very thankful.
September - the cruelest month - is 2/3 finished, and there are no negative warnings. Revenue comparisons will be positive Q/Q and Y/Y. Nearly all companies have trimmed down so they are profitable at lower revenue levels. So even if the recovery is very very slow, they will survive and thrive, and add to their cash, etc.... So the slow recovery will not be a drag on tech.
From what we've seen since our last conversation, the trend is definitely up. As others are pointing out, current P/E will not give you accurate guidance. And in my view, the governing model right now is that as long as companies report higher revenue, their stocks will rise, regardless of P/E.
Still 100% invested. I think 10% further gain in chip stocks (Intel, Altera, Xilinx) is a sure thing.
Sarmad |
