Dave,
1. INTC decided to reprioritize their spending. They are postponing completion of one fab because they decided to concentrate on another fab in Israel first. Not a cut back, just a shifting of spending from one fab to another.
2. Companies buy new equipment not just to increase capacity. New equipment is required everytime semiconductors evolve enough to render existing tooling obsolete. That is, new generations of chips, new designs, require more sophisticated manufacturing equipment.
3. Your entire bearish argument takes hypothetical to the most extreme limits. This could happen, then this would happen, then it gets worse and worse ... so the stocks will fall further. Give me a break!
Yes demand must increase (catch up) to support the huge gains of the past year (or past six months). Hence, expect share prices to increase at a slower rate going forward.
Nevertheless, this is a once-or-twice a year buying opportunity like July 96 and April 97. By buying during these times, you double your profits.
I can't guarantee we've seen the bottom of this free fall. But the shares have fallen enough to suit me. In two more years, I have every confidence that I'll have at least doubled my money from Friday's purchase at $31.63.
Sorry I have to take the opposing argument. Keep the negative comments coming. It's at least a reality check for the more optimistic of us.
By the way, I've only become sooooo enthusiastic as a result of the recent 35% drop. Before, I was an owner, but I didn't expect much action to the upside for the next year. Now I do.
Later.
Stu B. |
