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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (42794)	1/18/2009 4:42:21 PM
From: Donald Wennerstrom	2 Recommendations Respond to of 95515

This is chart that is similar to the last post, but this time the time scale is 5 years. Over this period of time, the SOX has greatly underperformed the SPX. In 04, while Bookings and Billings were quite good, the SOX went down by 25/30 percent while the SPX gained a few points. A couple of times, in 06 and 07, the SOX was able to approach its beginning 04 value, but never quite able to achieve it. At this point, the SOX is down over 60 percent from its value 5 years ago. Over the last several months, the market has been bombarded with bad news in all the sectors, including the semi sector(s). Many people think all the bad news has been priced in, others do not. People like to invest in the semi sector(s) very early in the recovery cycle because they say that this area of the economy "will lead the recovery". Also, the gains can be very great when getting in early in the cycle. The question is - are we really at the bottom of the cycle? Even AI doesn't want to venture a guess! <<At this point there is enough evidence to support either case so it will be interesting to see which camp ends up being right in the coming weeks.>> Message 25332963 Back on Jan 9 in Las Vegas at the convention, John Chambers surveyed the audience on when they thought the GDP growth would turn positive. He asked for a show of hands who thought it would turn up in the 1st 2 quarters of 09 - 1 hand went up, then he asked how many thought it would go up in the last 2 quarters of 09 - most hands go up, then he asked how many thought it would go up in 10 - then all hands went up. "That's pretty much what my customers tell me," says Chambers. Message 25314169 That is what I think we are seeing now with the rise of the market, particularly the SOX and SMH, from 11/21. Most people "in the room" see a better 2H09. They want to get in early in the cycle so they can get the maximum gains. These people could be wrong, but we will have to do as AI is doing above, wait for more data.