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

To: Donald Wennerstrom who wrote (53261)	8/15/2011 4:34:31 PM
From: Return to Sender	1 Recommendation Read Replies (2) \| Respond to of 95596

Great chart! If one looks at P/E's alone it's hard to find a time in the last 15 years when stocks were this cheap. I will use INTC as an example: moneycentral.msn.com Looking at your chart I see a pattern of higher earnings and expectations at, or near, market tops. Lower actual earnings and expectations at market bottoms. It's the same game as it ever was. It's just that many companies are actually better off financially than ever. Stock prices are so much lower than they were in 2000. That's great. It's hard to believe how cheap these stocks are based on the way we valued stocks back in 1999 and early 2000. Unfortunately, just because a stock, even a market is cheaper based on current P/E ratios, there is no guarantee that things won't get even cheaper still. After all actual earnings and expectations can fall as well as rise based on an economic cycle and what is going on in the world. Today was another great day. The volume was less than spectacular however. The SOX, and market in general could go on to new highs from here if earnings and outlooks can continue to beat expectations for the foreseeable future. If not then eventually we go lower. When a lot less is expected for future earnings then the SOX and market bottoms all over again. RtS

To: Donald Wennerstrom who wrote (53261)	8/16/2011 6:45:52 PM
From: Jacob Snyder	1 Recommendation Read Replies (1) \| Respond to of 95596

It's especially instructive that, in early 2009 as stocks were bottoming, negative earnings were expected. The brief time that was true, was the best time to buy the stocks. It is probably impossible to chart it, but I'd bet a clearer pattern, would come from charting actual gross margins. They would graph in the same sine-wave pattern as stocks and semiequip bookings do. It would be interesting to see how correlated the waves are, and what the lag time between stock peaks and GM peaks is. One of the things which convinced me to sell my long positions in the runup from mid-2010 to early 2011, was that margins (for semis, semi-equips, and the overall economy), were at the top end of the LT historical range. When KLIC had 48% gross margins for 1FQ11 (reported end of January), I thought (and posted), "things can't get any better..."