To All, Thoughts on putting the tech behemoths:
1. IBM is in a heap of trouble and still way overpriced. There is a limit in how long they can continue to run up a huge debt load to make it look like they have earnings growth. Getting kicked out of Radio Shack is not the end of the world, but it is also not a real good sign. Buy puts on any move toward par, but, be careful, as it will be a while before the next fantasy eps report.
2. Microsoft looks weaker than it has in years and it is still making all time highs on the stock price. The eps growth rate this year could go to the low teens, while the bowwow sells for 55 times. Anyone else think this is a wee bit out of balance? But be very careful on this one, as MSFT has the cash to fake a quarter or two before bowing to the inevitable. Also, they can always pull a Compaq and make a large acquisition and cover their shortcomings with phony crap about one-time charges. In general, MSFT doesn't tout as much as a Compaq, Dell, or Micron, but that could change in tough times.
3. Intel is sucking wind. However, the price is not super high right now. I will be buying puts in the low 90s as Intel has seen the immediate future and it is murder. The market has been willing to forgive an 8 pct. eps drop and 1 pct. revenue growth, but the suckers will wake up some day. I suspect the next lousy quarter could do the trick.
4. Compaq is hurting, but they are masters at covering their wounds prior to the battle. The real reason for the buyout of DEC may be the fact that neophyte investors ignore one-time charges. Also, the channel stuffing they have done may carry them one more good quarter. So, I am waiting on them.
5. Dell. Not time yet. This one will crash the farthest when it crashes, but it is still doing fairly well at rearranging the chairs on the Titanic right now.
6. Micron. Losing money hand over fist while defying gravity with its stock price. If you don't own MU puts, get a lobotomy. -g-
7. AMAT. Dead meat, but they may be able to sharp pencil the accounting on the next quarter.
8. Gateway 2000. Last quarter's eps are now on the fiction best seller lists. I don't know when they can no longer fake the facts, but that time is definitely growing near.
9. Hewlett-Packard. Underperforming and overpriced. For several quarters now. The Compaq Dec deal can't be good news for their businesses. When will folks realize that nothing good is happening right now? My guess is, soon. Buy puts on any upticks.
Good luck, MB |
