Sam, I have several peaky indicators for the top of this tech cycle being either past or very near: 1. The slowdown in unit growth of pc sales since late 1995. 2. The collapse of dollar growth in pc sales since 1995, which could be turning negative soon. 3. The collapse of profits in the DRAM, SRAM, graphics chip, logic chip, and flash memory markets. 4. The possibility that networking is slowing has finally reared its ugly head. Game, set and match if that turns out to be true, and I believe it is. 5. Overcapacity in all large markets. True, you can find niches of strength, but the big markets are in glut. 6. Insider selling at tech cos. is huge. True, some is due to options as a substitute for salaries. But I have never known an insider to sell when he thought the stock was about to double. 7. The absence of productivity gains after the purchase of expensive IT crapola. In fact, productivity growth continues to sink into the sea. Lone Star and many others claim that there has to be a new school of economics invented to prove that productivity growth is really going up, but the trade deficit and the budget deficit and the growth of debt just shows them to be flat out wrong. It reminds me of Texas A&M football fans who claim they have never lost a game. They have occasionally run out of time. -g- 8. Every day, Y2K gets one day closer. It is not the end of the world. It is just the end of the free spending in the IT area which has spurred this tech stock bubble. 9. Reaching out for cheaper, better alternatives, like NTs, Net Pcs, NPCS, etc. 10. The fact that only the top tier cos are growing indicates a peak has been hit. Before the peak, even Keystone Kop companies can grow, names like Gateway, Micron, Packard-Bell, Motorola, IBM, etc. Now, even the top names, Cisco, Tellabs, Intel, etc. are finding it a rough row to hoe out there. And the list of the unscathed top tier cos. grows shorter every quarter. 11. Behavior on the part of investors. Previously, stocks had to beat the whisper #, which was higher than posted #s. Now, the whispers are dipping below posted and if the cos make posted, they are treated like kings. This will not last long.
Hope this helps, MB |
