jacob snyder downgrades amat from strong buy to hold,
1. I issued a strong buy on 9/1/98, as the stock slid below 26. I'm now downgrading it, based on valuation. There is simply no reason for the stock to be up 50%, or for stocks like cymi to be up 100%+.
2. The industry, I think, is at the first curve of the "U", where the down part flattens into a prolonged flat part.
3. I'll re-issue a strong buy when the stock is back below 26.
4. lots of people are going to be very disappointed with the powerlessness of the fed. Greenspan can't wave a magic wand, sprinkle pixie dust on Japan and Brazil, and fix everything. For the last 14 months, the fed has been working very closely with the Treasury and the IMF, trying to stop the tidal wave of global de-leveraging. That wave began as a ripple in Thailand, and has spread to Indonesia, Japan, Russia, and now Connecticut and Brazil. Nothing they've tried has worked. Lowering interest rates will prop up domestic demand (which is not a problem), and make borrowing easier (again, this is not a problem. The problem is to much reckless borrowing and investment in un-economic projects)
5. The fundamentals of the semi industry are improving, but we are still a long way from seeing any improvement in the fundamentals of the semi-equips. Technology buys will keep the semi-equips on a starvation diet for a while, at least another 6 months before orders show any sustained increase. DRAM and foundry look to stay in overcapacity through 1999.
6. I continue to sell this rally. Sold all my intc this morning at 87, now have no margin and a pile of cash, and debating whether I have the courage to buy more nvls puts. I am stunned at the whipsaw changes in sentiment the market and this thread display. Lots of noise, signifying nothing (except a selling opportunity before we fall off the right shoulder, for those who can keep their heads). |
