I think LRCX and the market will work its way lower this year, the GM's and Ford's of the world are one of the first shots across the bow. The consumer is in debt up to their eyeballs, and are now seeing their net positive monthly dollar be soaked away by higher energy prices, higher interest rate expense and inflation in general.
Housing bubbles in California, Florida, Las Vegas etc are like the internet boom of the late 1990's, rampant speculation fueled by Al "Easy money" Greenspan. Interest rates are still below the inflation rate, so extreme accomodation is still present. What happens when rates get to "normal" as in 2% or more above the inflation rate? What happens to the ARMs that people hold? What about the stretched consumer that because of extreme home price appreciation has to use an interest-only loan to purchase a house. Risks abound, IMHO.
The U.S. is the "uber-consumer" for the world, Japan and the Euro-zone are weakening again, the fundamental question for the world economy is who is going to buy all those goods and services when the American consumer finally gets tapped out, which I think is in short order.
Semis and CAPEX are cyclical and we are entering a cyclical downturn for the global economy, LRCX and the rest won't be spared, just like they haven't been spared in the past. Once revs and earnings head down, those low ratios won't look so low anymore.
LRCX's move to $30 was a gift, here we are back at $25, what's next $30 again or $20?
I'm not short or long, 100% Money Market, there will be a time to buy or be long, it just isn't now, IMHO.
A-M-S |
