I don't take credit for that one.
If you recall I presented a set of scenarios which I believed reflected all the factors influencing the share price. What actually happened was, as usual <g> something I hadn't anticipated.
What seems to be shaping up is a comination of both:
Scenario 1: Total War -- a situation of overcapacity in the industry, which of course hurts everybody given the high fixed cost ratios; and
Unanticipated: Many other "bellwether" companies (e.g. ORCL, ALTR) have missed estimates WHICH THEY ATTRIBUTE TO Asian influences, dragging down every company that's ever had a dude in the area <g>.
To me it seems clear that many technology companies had looked to Asia for high rates of sales growth going forward. The PC and electronics markets in the US have apparently reached saturation and will no longer sustain 20%+ growth rates implied by the multiples on some of these companies (INTC, LSI, CSCO).
The current overseas setbacks have allegedly dried up that growth for a while. Now here's a macro opinion: what's going to happen there? Well once you begin transitioning your economy and culture to an information-era technology level there's no going back. These countries, under the guidance of concerned parties such as the IMF and the US will eventually regain their footing and resume stupendous demand growth for technology goodies. What we need is someone, preferably someone on the scene, with their finger on the Asian technology-economy pulse, who can estimate when that turnaround gets underway.
Once it happens, prepare yourself for some incredible, smurfy growth in PCs; all derivative PC industries like HDDs, CPUs, software; telecom and telecom derivatives like wireless and celluar gear; consumer electronics and chip suppliers to consumer electronics makers; etc.
For DD-pulse folks, check out T Bowl and A.S. Ong Yiu on this and other DD threads.
PX (bleeding to death!) |
