Most of the semis have doubled and tripled since their lows and are near two year highs (eg. MU, AMAT, NVLS, KLAC, TXN...). MU in particular makes a good short on weakness in the new year. If you have read my (extreamly infrequent) posts on the Micron-only thread, then you know that I've been right on every major direction on MU in a very timely manner. I don't post there much because those guys don't seem interested in discussion. It seems that they are mostly very short term traders who just chat one or two lines comments every few minutes. Anyway, the case for MU being in the 50s is based on the *hypotheses* that we are in an *up swing* on the DRAM prices (as oppose to being in bottoming out process). I have many contacts on the street and have access to a number of research reports and I can tell you for a fact that there is far too much excess capacity left to bring about any up swing and pricing power to DRAM makers.
Now I grant you that the smies are in a bottoming out process and that buying them selectively on a pull back will produce a handsome return within the next 2 years. If that is the game you'd like to play, and you should realize that it will be a bumpy ride, then you should go with the leading (cyclewise that is) equipment makers and speciality producers. Some of the best ones are NVL and TER (leading indicators), AMAT and IBM (copper technology), LLTC and DS (speciality chips). Hope this helps.
Merry Christmas to all and I wish you all the very best in the coming year.
Sun Tzu |
