covered my ASMLF short today at 92.5, when I saw the rest of the group up sharply and ASMLF had not moved yet. Made a bit of money. Oddly, it's down for the day. I expect it to follow the rest of the group up, and then I'll short it again, to hedge my long AMAT position. Something strange is going on here:
INTC, CPQ, MOT warn and the sector goes up. DRAM prices keep falling, pushouts keep being announced, earnings for the semi-equips are being steadily lowered, and the group goes up. Apple continues to flounder, and the stock doubles. KLAC warns and the stock is up sharply. Weird, weirder, weirdest.
In 1996 I kept on asking, "why are valuations so low, it's not justified by the facts". And the stocks kept dropping. In 1998, I keep asking, "why are valuations so high, it's not justified by the facts." Why is AMAT at a P/S of 3 instead of 1? Objectively, the situation in April 1998 is as bad as August 1996.
Big Bucks, it's not a short squeeze, add up how much money it would take to do that, even God's Banker doesn't have that much. It's hard to believe that the sector is being bought based on an expected 1999 or 2000 upturn. Mutual fund managers have never thought that far into the future. Is it just a beta phenomenon, the expected extreme volatility of a cyclical industry with no visibility? Does someone know something I don't? Onward, through the fog, at full throttle. |
