>>Did T/A warn about AMAT's earnings warning on Friday?
No. I said TA cannot save you from the unforeseen.
>>Why buy semi stocks now when it looks like there will be more earnings warnings over the next week?
Waiting might be a good idea, maybe not. Back in the late summer of 1995 as the stocks were breaking down in the face of a totally positive environment, it didn't pay to wait for the good earnings reports that came in October.
Picking bottoms is a tough business, but during past cycles it has paid to buy the cap equipment stocks when they are trading around 2x trailing sales, like now. The stocks may get knocked around here, but the charts are improving. I can't imagine a better place to invest Yahoo proceeds for a while. Limited downside, and snap-back could easily be 50-100% in some of these issues.
There is a semiconductor investment conference in San Francisco this week. I just heard it Friday, and I don't know who's it is, but any good news from it could accelerate this nascent rally.
I'm sticking with what I believe are the technology leaders, most of whom have not made lower lows this year. I did buy PRI Automation yesterday, though. $16 is just too hard to resist.
The communications chip companies are in their own sustained bull move, and are technically the best investments. Companies like Level One, PMC-Sierra, MMC Networks and Vitesse.
I was lucky enough to have made a literal fortune from Yahoo. I did something similar with Netscape in 1995, and wished I had invested all of it into the tech wreck of early 1996. That's the principal reason I'm following this strategy now. |
