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Technology Stocks : Semi Equipment Analysis
SOXX 285.23-3.7%Dec 17 4:00 PM EST
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To: Donald Wennerstrom who wrote (43414)2/14/2009 8:06:20 PM
From: Donald Wennerstrom3 Recommendations  Read Replies (2) of 95597
 
I added 1 more column to the bottom portion of the table posted earlier on actual and estimated earnings.


If you make the argument that the lousy earnings forecast for 09 come to pass and this is the baseline, the last column added shows the estimates to the upside from 09 to 10. In other words, assume the tremendous drop in prices, particularly starting in September and bottoming on 11/21, has taken the 09 estimates into account, and now the market is looking forward to 10 and comparing these estimates to the 09 estimates. Wow!, now that is a nice looking "picture". A gain of 13.52 at the bottom line with all stocks participation in positive fashion to the new bottom line number. What's not to like about that? No wonder the SOX and SMH have been doing well lately. Never mind that if this comes to pass, 2010 earnings will still be an anemic 5.94. Maybe the market believes that 2011 will bring earnings back to the 9 to 11 levels of 07/08? That's 3 years away. How long will it take to get back to the 18 level of 06?

These are just a lot of rhetorical questions which have no answers at the moment. Just something to think about while we wait for the economy to recover on some yet unknown time frame.
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