<<...and it could be a fair while before we retest old highs.>>
My opinion is that time will be measured in a few months for a lot of techs. There is much concern over SEA in the market. The market is trashing every company that has anything at all to do with SEA. It doesn't matter whether the company is buying from, building in, or selling to SEA. So while I agree with you in that it is "...better to be rich than right...", one way to do this is by being a contrarian. This does not mean buying any old stock that is at wholesale prices just because everybody else is selling. By being selective and using some Ney to say when to buy and valuation to say what to buy, a contrarian approach can be very productive. Hold your JBIL. It's too late to sell now.
Irrational markets make for inefficient markets. And right now there are a lot of good buys. Who are the consumers for the stuff that JBIL builds, SEA? Not by a long shot. We in the US are. Will SEA currency devaluation hurt JBIL plants in SEA, paying workers in local currency, selling products for dollars? Not by a long shot. Who will benefit from cheaper electronic parts bought from SEA? JBIL for one. I have figured this stuff out and there were some large block trades. So I bought JBIL calls Friday, instead of covering my short against the box, for tax reasons.
The potential assembly market for ECMs is quite high. HP makes, woops, I mean sells a lot of printers. If anyone has the business to sustain an OEM shop, I would have guessed HP would be at the top of the OEM list. Yet they have been farming out printers. Apple sold their production facility to SCI who now builds and ships MACs directly to consumers.
There are a lot of differences between ECMs. Some have little or no design capability. Some just make circuit boards. Some make the whole end item and ship it directly to the consumer. That is one reason why you see differences in margins, and why some are growing more than others.
When will the market figure all this out? I have learned that it is usually sooner than later. |
