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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: MetalTrader who wrote (7555)	9/7/2001 7:37:27 PM
From: energyplay	Respond to of 23153

Semi stocks have more support - I'm short Xilinx XLNX and had some puts. XLNX just did not want to go down today - at one point it was up a whole point. The puts are for September, and XLNX may warn before expiration, but I had a small profit and I took it. Left the short open, since I can wait until January or longer to close that. I expect most Semis to go much lower, but I don't want to grind it out until November. I think we have seen the bottoming in Semi orders due to the collaspse of the U.S. Tech boom - however both Asia and Europe are starting to turn down, and the cell phone sector, and I think there will be second drop in order rates. Not sure how soon that will show up. Also, pricing presuure contines. This next drop won't big very big, but both psychologically and from a profit stand point it will really hurt the Semis. That will push the real upturn out to the middle of next year, which is way too long for many funds and investors. I think there must have been immense tech and Semi shorting, and there's probably a lot left. Some of these shorts may be offshore, and not show up in the published short interest numbers. Also, many of the semi companies have lots of cash (like LLTC, AMCC and MXIM - about 1 Billion each) which could be used to buy back shares. One other factor is that Semi insiders have stopped selling - they finished around August. I think the easier shorts (for now) are in the NYSE side. Notice the builders like KBH, LEN making nice rounded tops. Might be good shorts, but I would worry about a big rate cut. Plus P/Es are still way low relative to rest of the market. Also, they often have undervalued land banks as assets. The builders have also been rising most of this year, so are NOT likely to be included in tax loss selling. Finally, the holders of the building stocks tend to be value investors & value funds, with the later experiencing capital inflows, so no selling pressure. I have thouhgt about shorting them. I think builders will drop with the economic downturn, but maybe not enough to make them an attractive short. I like the consumer loan / credit card as short plays. They have credit card loans as assets ! ;-) With the economic turndown, they will show red ink and tank nicely. Think of them as the OSX of the financial sector - VERY volitile swings with the credit cycle. The consumer loan companies have been dropping most of the year, so they should have lots of tax loss selling. Most value funds will only touch these companies briefly during an upswing in the economic cycle. So these tends to be owned by general market funds, which are somewhat more likely to see selling pressure from redemptions. Capital One COF and Household HI are my current favorite shorts. Puts are availible, although premiums are climbing. You will notice an emphasis on "who owns it ?" in the above. This seems to me to be an important key to better plays, especially in this market.