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Technology Stocks : Semi Equipment Analysis

SOXX 299.48

-4.8%

Dec 12 4:00 PM EST

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To: Donald Wennerstrom who wrote (44987)	8/9/2009 10:31:44 AM
From: robert b furman	Read Replies (2) of 95574

Hi Don, The ECRI has consistently indicated a growing economy by late summer. The last report suggested the economy will show growth by September.It is currently at a 5 year plus high. I watched the ECRI collapse like a slow train wreck all last year and early this year. I believe they are quite credible. With regard to the homeowner lack of equity - I believe it is being vastly over blown. First off - everyone needs a place to live.Few sell out their home just because they are upside down in them. If you've been laid off or lost your job - different story - but we seem to be turning the corner on the unemployment rates getting worse. Last but not least there are many who have jobs and have been saving.Like our stocks realestate has the potential to turn quickly. Once it appears the bottom has occurred many will chase the prices hoping to be close to the bottom and many will at worst be close to what they paid.That will take a lot of pressure off - however doomsayers will still be calling for Armegeddon - much like the bears say in the coming October we're going below S&P 666 again. I'm thinknig just as we see in stocks, any dip in real estate will be absorbed by the trillions being held on the sidelines in cash that is earning a negative return. The trillions on the sidelines, is the forgotten saving grace that all of the doomsayers never bring up.The longer the trillions stay on the sidelines and markets hold their own, the more willing/anxious cash holders will become and embrace higher levels of risk. In the longer term, this will support all asset prices. Our recent spike up in stock prices has not yet completely brought stock prices up to real book values.The fear of a continuing decline in earnings has stopped compressing the stock prices to a percieved constant loss of cash drain. These are very good values now and should be aggressively bought on any pull backs. Most tech stocks have been on a downtrend since October of 2007.Depending on the recovery of their earnings they have continued to slide for over 2 years. I have drawn trendlines connecting the tops of the downtrends. I believe there is a general pattern of most stocks breaking up over this down trend, and traveling within it for a short term. Some earlier movers have popped up over it and are now subject to a backtest. Upon declining down back to the top of this doiwntrend (and slightly below it)is (IMO) one of the safest entries,with intermediate term rewards of price appreciation we will seee in a generation. It is a stock pickers game and the time to be applying it is right now. Here's my approach and idea.

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