To clarify my position, I have little doubt that the sector will come roaring back. I just think that people should realize that prices can go down, and can stay down, for significant periods of time. I guess the ones who really worry me are all the people who were buying Cymer in the (post-split) 40's on the margin and STILL think they made a good buy. So many people act so surprised when the tech sector gets its periodic whipping.
Now (actually a couple of weeks ago, duh) is the time to be defensive. When the sector seems to hit a bottom and just sit for a while, I'll be in with both feet. I don't think anyone can time it with any accuracy. But as long as an investor isn't margined, isn't going to need the money for two years, and has some decent diversification, you could hardly argue with a buy-and-hold strategy at this point. Personally I'm going to wait a while, but I might admittedly miss some of the party.
The one area I would not advocate a death-grip buy-and-hold would be in litho. There are just too many players with too many competing technologies, and it changes so rapidly. If Sematech can't eliminate a single technology, how in the world is an investor supposed to be able to pick the "winner" at, .08 or .13um? I'd rather go to Vegas than have all my money in JMAR or SVG or CYMI, or even a mask company. A lot of people are going to lose a lot of money on R&D. For all we know, IBM's construction of a synchrotron-based fab may be JMAR's death knell. Well, okay, "death knell" is a little strong since they have a couple of other lines, but who knows?
Okay, I've said my piece. I just don't think litho is the place for small investors right now. If someone can hold a stock for 18 months without pain, and is prepared to ride it down (i.e. not margined), fine, pick up some AMAT or NVLS or KLAC or TER or something and put it away, it's a great long-term investment. And maybe the sector will shoot up tomorrow. But it's just as likely that it will deteriorate further. Anyone who is holding a heavily margined account full of stepper stocks because "it's got to come up" soon, or "the chipmakers have to have .18um (or 300mm) equipment or go out of business, and earnings are going to double for sure", is kidding himself. |
