Sometimes "worse they have ever seen" isn't really accurate, or is accurate only because the people making the statement haven't been around a long time.
Other times, its accurate and from people who have seen a lot and that might be the case now, but even when it is that can be a good time to buy as long as
1 - You have a long term investment horizon.
2 - The conditions are representative of temporary factors, and not a long term decline of the industry. In the case of companies like GM, I'd say its a long term issue (well really long and short term), so I wouldn't be buying, but is that the case in semiconductors? Well maybe not a long term decline, but it could be that even after recovery, the future growth rates are more normal, rather than exceptional like they used to be, esp. growth in profit (growth in terms of number of chips made, or esp. in terms of computing power, or total GB of memory made, is likely to be very strong long term, but how much will that mean to the semi companies, and the semi-equipment companies bottom line?)
Since most (in recent times all) of my investment is dollar cost averaged, and long term, I'm not sure that its a huge issue to me if this is the bottom, of it the bottom comes in a year or two at prices half of what they are today. But the future of the companies in the years and decades to come is important. |
