Carl:
I'm overwhelmed by the thorough and detailed response. Also grateful. Good folks in the Warren Buffet State.
You present quite a developed scenario for a time which has yet to arrive, as is the case with most scenarios except for scenarios that deal with times that have already gone by, but in either case the object is something we are prevented from seeing, such as if we weren't there. (Forgive me, it's late in the evening)
Your scenario, (to continue what was our subject before being so rudely interrupted) is predicated on two market events: the shift to build-to-order computers, and the y2k phenomenon. You say semiconductor sales were hurt by b-t-o and that we are yet to reap the rebound. I very much like the premise, but I can't quite follow the chain of cause and effect. Next, and the one I like best, is the bullish and uniquely contrarian take on y2k: the surge in PC sales as 2000 nears. I like this very much! Of course! What a win-win for the people who wait: They solve the y2k problem at the same time that a new generation of computers comes on line! (If one can really draw such a sharp line between generations; but still, it is much, much better to wait, whenever possible, to buy a computer, because they get nothing but better AND cheaper. Note the recent surge in computer buying when Windows 98 finally came out. Some have pointed to this as the reason for Intel's strong earnings this quarter: people were WAITING). Excellent!
A secondary point you make is that semiconductor companies will need to recover before ordering equipment. I am ignorant here, but how can they sell product if what they produce is obsolete? Or will it just be a much narrower group of companies that participate? Or will technology wait for them? I am not with you as much on this one.
It seems that your strategy implies the market will not see new lows. Are you really that sure, or are you keeping some powder dry? You say that Micron was strong during recent market weakness, and I noticed this too. With few exceptions the entire semiconductor and equipment sector idled while everything else went down. I did cue on that for Rambus, which subsequently made a big move. There is talk that next week will be big for semi's: siliconinvestor.com (Note: I have no experience with P&F, and am generally skeptical about pure technical analysis) or at least for Rambus and possibly Micron because of the Intel news. I question the valuation of Rambus, but have no real way of knowing. Broker price forecasts may be subdued to preserve accumulation opportunities.
Technology, vis the Nasdaq, is stronger than the DOW post sell-off, as Nasdaq is just below the 200dma while the DOW languishes below. Tech leading again?(still?) Just heard Bob Brinker, and he is bullish: new highs by new year.
No recession worries? Why Compaq and not Dell? Heard Dell continues to penetrate...Why are you stuck on WFR if bad management, (or not great). Remember, the body goes where the head makes it go.
Thanks again for the great response--
wily
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