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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: nokomis who wrote (107974)	7/16/2000 10:39:54 AM
From: Lane Hall-Witt	Read Replies (3) \| Respond to of 120523

More on Joseph's semiconductor call -- an excerpt from this week's Barron's article, "Dangerous Opinions." What's interesting is that the story clearly points to manipulation coordinated between the analyst and traders, yet Barron's takes great pains to say that there's no conspiracy here. So much for investigative reporting. LOL! I've highlighted a couple of the more interesting portions. interactive.wsj.com Solly's Joseph, after conferring with his research colleagues who cover related areas like semiconductor capital equipment, downgraded the semiconductor sector from "outperform" to "neutral" the day after the July 4 holiday weekend. Joseph cited "slowly reversing industry fundamentals" in his downgrade of the heavily cyclical chip sector. The published research note came on the heels of what one Solomon employee calls, "an informal conference call," held with select clients during the week of June 26. During that call, Joseph pointed to a possible weakness in demand for mobile phones, of which semiconductors are key components. After being challenged on the call to some degree, the analyst did some more digging and conferring with his cohorts to see if he was indeed on track. In fact, Joseph was even more convinced of a likely glut in these chips, hurting the likes of Texas Instruments, one of the top makers of semiconductors in the world. At that point, Joseph "was sort of forced to take a formal stand" and publish a bearish note, the Solomon employee says. In the report, the analyst hung the equivalent of hold ratings on Texas Instruments, Advanced Micro Devices, National Semiconductor and Silicon Storage Technology. Share prices of this unfortunate gang of four suffered after the verbal warnings to Solly clients. Most recovered a fair amount of ground by Friday. Silicon Storage Technology was an exception, closing on July 3, a sleepy trading day, at 99 and plunging nearly to 84 on July 5 in reaction to the note's being published. SST closed Friday at 86 15/16. (For more on these and other tech stocks, see TechStorm.) Conspiracy theories abound suggesting that Joseph timed his bearish note after the holiday in cahoots with shorts, who allegedly caught wind of the downgrade early and capitalized on the call. Of course, as we have been chiding sell-side analysts to be more discerning, we would prefer not to give credence to any of this. Instead, take the note for what it's worth and applaud Joseph for his fortitude and independence, especially in the face of the lunatic fringe.