Tom:
As a follow up to my earlier DD post. While I like QNTM in the sector I actually don't like the whole PC sector and their suppliers for the 1st half of the year.
I think we'll see a slow down in the high end for the 1st half of the year. The delay in WIN 98 is part of the reason, year 2000 is part of the reason, Asia is part of the reason, falling exports is part of the reason.
While all the parts may not be that significant it will be enough to slow growth and impact multiples (of course this is hard to measure against the low interest rate backdrop and the strong dollar).
There are some strong positives like:
1) component prices falling, chips (INTC pentium @ 40%), DD (look at the 9G SEG) screens, etc. Low prices will bode well but I think we'll see a breather until July ish and its too early to tell at this point.
2) Low end, under $1500 will continue to grow but this is not the high margin stuff.
3) Notebooks, video applications, voice applications, etc. will keep improving and move towards high end with speed and memory.
I think components (INTC, etc.) have gotten ahead of the software and until software catches up we'll see a slowdown. But not this Holiday season, the malls around CT are going great guns (of course there is an issue with having good reliable sales and clerical help to push the product).
As you can see I can offer some conflicting advice as to not to buy right now. Doesn't mean we won't have a rally through mid January (Abbey Cohen on Friday indicated she expects DOW up 800 or so pts in 98) between year end bullishness and bargain hunting (I'm assuming some of those $$ on the sidelines waiting out loss sale rules wil come back in in Jan.).
Tim |
