peaks,troughs,strength,weakness:
A B C D E F
klic 20 630 28 178 11 16
klac 37 420 36 150 28 27
amat 37 490 52 255 20 28
nvls 36 410 53 219 24 35
intc 64 410 65 264 65 66
A=96 low, as a percent of 95 high
B=97 high, as a percent of 96 low
C=today, as a percent of 97 high
D=today, as a percent of 96 low
E=98 lowest stock price, if the 97 to 98 decline is the same %
as 95 to 96 decline
F=this week's lows
Thoughts:
1. comparing columns E and F: only INTC and KLAC have already
fallen the same percentage this downturn as the last.
2. even with its huge decline, INTC has performed better than
any of the semi-equips. It has fallen the least from its
last-peak-highs, and is the furthest above its previous-trough lows.
3. Since 1993, the sector has been as steady as a metronome, swinging
yearly from peak to trough and back again. 2-year cycle, peak to
peak or trough to trough.
4. The numbers for AMAT and NVLS are very similar. The market treats
them the same. I expect AMAT to pull ahead in the next one or two
cycles, and achieve a CSCO-like dominance of its sector.
5. If you could go long at each low, and short at each high, you'd
make the most money with the stock that has the worst fundamentals:
KLIC. If you can't foretell the future (time the market), then this
is the riskiest stock. Today, it is sitting at its high for 1993.
Dead money for 5 years if you bought at the high in 1993 and held.
AMAT, KLAC, and NVLS are today all below their 1995 highs.
6. If you're going to make mistakes in timing, none of the semi-
equips are very forgiving, but AMAT and NVLS hold up better. Better
yet, if you don't have the discipline to wait (and wait and wait)
for a good price, just avoid the sector. The volatility is brutal.
7. KLAC is being treated much less kindly by the market this cycle
than last. I'm not sure why. Maybe the market just likes bigger
companies, or maybe there is an expectation that AMAT is going to
aggressively push into KLAC's turf during the next upcycle. Or maybe
someone knows something I don't. Anyway, the relative weakness
raises a big red flag.
8. these numbers argue for selling as soon as you can get 28% cap-
gains taxation (12 months), but not waiting for 20% (18 months).
9. Anyone see other patterns? |
