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Technology Stocks : Semi Equipment Analysis

SOXX 294.38

-1.0%

Nov 7 4:00 PM EST

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To: The Ox who wrote (13707)	3/4/2004 9:06:56 AM
From: robert b furman	Read Replies (1) of 95385

Hi Mike, Going off memory here - but last quarter Intel narrowed the range by cutting off the lower estimate,and it came out with a record. It is known that the Christmas quarter is a student laptop windfall.Q1 usually is a seasonal downturn.Most interesting will be Intels penetration into the business IT market.All throughout this last quarter business investment in IT has been increasing. Intel has had many new server microprocessor intros of late-any market share gain here could be a surprise. Last but not least Csco's sales were up very nicely - partially credited to their acquisition of Linxsis (spelling?) - wireless sales.Heck this is all happening as a result of Intel's packaging of Centrino. Intel's currently the largest owner of up and running 300mm fabs.They say they've got yields up to 200 mm levels.My bet is their margins will surprise all - 4regardless of what mix Centrino is based on laptop sales. I think this market has been digesting a lot of analyst crap and extrapolation.We've had a protracted dip in here.It's purpose has been to shake out weak (recent buyers). Pundits saying the cycle has peaked just haven't been there before. When the SCE cycles peaks - orders are doubled up to assure delivery times.All chip makers are blowing out bottomline profits with pricing and volume.Heck most chip makers just got back to being in the black in Q4. Cash flow analysis has far from peaked. What we're seeing is order flow and cash flow catching up with reduced headcount(most firms are employing less than half the last peak employment levels)/downsized operations. This is the correction that must be put in to assure the next level up. I've been wrong about this more times than I care to admit. The gains made in chip and equipment companies have failed to hold in 01,02,and 03.The fact that this dip is holding - gives us our first inclination to say that we're getting consolidation instead of new lows. With this consolidation threatening a break to new lows is a must to shake out weak holders. I'm looking for double bottoms of receny setbacks in price.Intel in the 28-29 is a dip/buy opportunity more than it is a sign we're going back to 12's.JMHO MINOR VIOLATIONS OF RECENT LOWS MUST BE EXPECTED AND THEN OPPORTINISTICALLY ENJOYED. I'm thinking we're due for the first of a long absent pop up on volume with in the next 2-4 days.New lows if they occur will be minor violations of recent lows and should be jumped on. There is a lot of noise out there about brokerage house valuation concerns - it is crap! This economy is very nicely growing.It's not the old MOMO days - Thank Goodness !! Hold your tech winners with confidence - the cycle is just beginning. This dip is a place to aggressively "ADD TO".It also is a time to watch losses closely,as all stock must show profits or it is out to the woodshed - just as it should be. JMHO Bob

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