As Joe points out, your Tech Investor article didn't make his day, or my day. I suppose it is just confirmation, however, of what most people have been projecting out of the "Asian Crisis". We have probably reached that stage of this crisis where the results of the slowdown are becoming known. Not so clear, however, is when will it improve? It looks like it may be awhile.
My best guess is the semi-equips will "bounce around" for awhile just like they did during the period between the high prices of 1995 and 1997. If this is so, the "nimble trader" might be able to make some money while waiting for the next "consensus period" (4 to 6 months in duration) where all semi-equip stocks increase considerably. Since we are already in the last half of April 1998, it may be that this next "consensus period" may be delayed until 1999. Whenever it comes, and I believe it will come, the trick for maximizing profit is to be completely invested in the best stocks in the group to enjoy a relatively risk free environment for doubling or tripling your money.
Based on the extreme volatility and cyclical nature of this business, knowing when to sell is also very important. Otherwise the gains may be good, but in both 1995 and 1997, failure to sell at the right time resulted in losing most of those gains. As post 1900 shows, as of the close Friday, the group of 41 stocks is down 42 percent compared to their 1997 highs. Just to get back to the 1997 highs requires a gain for the group of 71 percent.
The semi-equips are a very depressed sector - and maybe the worst is not over - but someday there will be a perception it is over - and then we're off to the races again as in 1995 and 1997. I sure would like to be able to discern when that week arrives when we are off to the races again :) |
