Ramsey: My mistake, to include you in my lecture <g>. Your deadpan note to Skeeter was just too effective <g>. I'll try to reclaim my sense of humor.
FWIW, I hear your concerns. As you may know, I have shared many until recently. However, Mr. Market is thus far proving them wrong. (AMAT now up to $42++ this AM). Despite losing my sense of humor (<g>), I have maintained my flexibility and went from freq shorts and trades (w/ a bearish outlook) to a long position during the past few weeks. From 80% cash right before mid August and again in early October, to 95% long now, w/ much concentrated in this sector. Why? Six reasons why I think this sector (stock price AND fundamentals) is going up from here:
1. Long term fundamentals of the IT revolution. We ain't seen nuthin' yet. Exponential growth in the next 10 years. This alone makes it a no-brainer. I won't waste your time w/ 1000 anecdotes supporting my claim.
2. Morgan actually said he sees an upturn from here. He wouldn't have said that if the "crystal ball" was still foggy.
3. Despite deflationary pressures and a (resultant)change in semi capex decision maker mentalities, production capacity will have to go up (re; # 1 above), even when you factor in the bringing on line of mothballed equipment and dormant fab capacity, and equipment re-use. First w/ die shrinkage. Thereafter, 300 mm will ultimately come to life.
4. Don't fight the fed. And remember, give him any more bad macroeconomic news, and he'll likely change his (presently neutral) stance back to favoring more cuts in Jan or even Dec. You know the relationship between fed cuts and this sector in specific :)
5. Institutional money doesn't want to miss the ride up. The only question is, how patient are they?
6. The traditional bottom signals are happening in spades (bookings turns, consolidations, etc etc.).
7. Brasil and Japan, although weak in political will, seem to be tottering in the direction of the fiscal reforms necessary to save themselves. Worldwide consumption (of all things) will ultimately follow. My only worry there is Russian civil unrest / loss of nuke security.
All MHO,
BP |
