As long as there is room to manipulate the number it will be misused. The semi industry used to be viewed as "the computer industry", since that was where most of the chips were being used. With telecommunications, consumer products, automotive and virtually every capital driven market dependent on semi's, it is no longer just the Intels, IBM's, DELL's, etc that are the guage of their uses.
Technology has driven this market to where it is. IBM was the Atlas that held up the world markets, so to speak, this summer. Everything rally's around technology now. It has become the backbone of the market. As such, once earnings go flat to down in that sector, it will be hard to rotate into other areas with the same effect. Technology is a young person's idea of where everything is at. My 15 year old son is happy listening to the stereo and dreaming of driving soon. Using a computer is mandatory and second nature to him. Those same young investors invest in what they use.
With so much money coming into that sector, there will be many companies riding on other's coattails. If any of the leaders falter, look out below. The domino effect as it applies to markets.
There will be plenty of comments on the new b-t-b replacement in January. We'll have to see it in action to get a feel for how much it will be abused. |
