Hi Tommaso,
I agree with your thinking.
I originally (3 months ago) thought bonds were attractive because they seemed to be the forgotton asset class (vs. stocks, RE, gold, etc.). But now, aren't bonds climbing that proverbial "wall of worry?" I think that someday we'll be looking at 5% yields and will look back and realize what a great deal they were at 6%.
For now, I'm sticking with my macro theme: short semi equipment manufacturers. The DRAM spot price is down 20% in 1 month. Since many consumers are choosing the sub-$1,000 PC over the "latest and greatest" from Intel, an increasing portion of the microprocessor market is being commoditized, putting margin pressure on microprocessors as well. The Koreans and Taiwanese are huge semi equipment customers and will be spending their cash flow paying back $ debt, because bankers wont risk lending them new money to buy equipment given the excess capacity, currency and stock market turmoil. (Assuming bankers are still conservative.)
For those who like pictures, the SOX (as well as MSH) is showing lower lows and lower highs:
tscn.com
Also, here's a link for semi spot prices:
smithweb.com
BTW, how's that African frog doing? (Remember, I asked you to invite some Frenchmen over for appetizers.)
Best regards, John. |
