Wennerstrom Semi Equipment Analysis Message Board - Msg: 28352255

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Technology Stocks : Wennerstrom Semi Equipment Analysis

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To: The Ox who wrote (57290)	8/22/2012 5:52:49 AM
From: robert b furman	2 Recommendations Read Replies (2) of 59992

Hi Ox and Don, Ditto what Ox said about everyones charts. Seems to me the start of 99 was also a "Trough is here" moment. 98 ushered in horrible data and we all new Q4 98 was going to be ugly much like now per Amat's recent Quarterly conference. Few really new that the PC was being turbocharged by the internet - at least I did not. Many improvements have happened since - dsl,cable,streaming video,and wireless at most locations - thus giving us new smaller moble devices. The crash of 2000 gave us no hope for enduser demand as every one had too much old tech inventory. Fiber cables went dark and would never be relit. Now we have AAPL dominating 15 % of all chips purchases and they work margins low or you are on the outside looking in. Intel has missed the mobility initally,Microsoft's version have been late and not user friendly. Intel has been making huge money on mobility as all of the newest and best mobile products are going through Intel chip powered servers. As Otellini said "Intel is making the most money from mobility - AAPL might argue the point - but infrastructure build out is what got the intial PC cycle going in 2000. I think we are at an era of new competition.A lull so to speak. With Micrsoft about to issue a new Windows mobile version and Intel about to redefine what speed in mobile computing with electrical efficiency vs bulky Samsung graphic chips powerin iphones and i pads,we enter a phase where desire and demand are proven and now we beat up margins and expand unit count as price drops on all versions. This is always the step before Capex plans are initiated. Amat's commnets on Taiwanese fabs pushing out is clear. Intel wants to take on Aapl and it Samsung chip connection. Aapl is sueing Samsung over copyright stealing. The real scenario is all about huge markets and just a few players wealthy enough to even enter into the game. After Intel proves its 22/14 nm chips do what desk tops used to but with far less electricity needed,AApl could well switch to Intel for processors. The Taiwanese Fabs will then play catch up and be forced to buy leading edge technology as Capex once again expands. The rational allocation of capital is one of the key changes from the years of past and it is a good development. The enduser demand growth is once again coming on - in huge waves - observe the build out of the i-phone 5 coming next month if you doubt it. Lastly the Sox is a list of ever changing entries - many have gone away the M&A and some have gone away with wasted capital and relentless price competition. There are fewer players and they are stronger financially with some yet to go away. Lastly the biggest and best are morphinig into dividend plays. It seems to me the dividend plays insure the stock price from blowout low pricing - Amat displayed this at 10 this summer as it paid out 36 cents annually. Intel showed us the bottom last summer as it bounced of 19 and had 3 dividend increases in a year now up to 90 cents - yielding 3.4 - 4.4 percent. Overall chip sales are at record levels. Semi stockholders are gettiing rewarded with dividend payouts as most competitors have been bought up through M&A and the balance sheets are stronger than ever. If the fiscal cliff throws the stock market into a tumble - it will impact the dividend payers the least and may well take the pitiful bond yields - which will be taxed at higher rates and even if dividends go back to bush's pre cut rates (20%) - it will be the most preferential tax rate out there.Won't this bring a focus on dividend paying stocks even more? Fiscal cliff politicians blah blah blah - we are in a sector that is consolidated,has balance sheets that are fortress like,demand of product by endusers that is expanding at a multiple of the global growth rate,and no business can afford to not stay current with the new technology that enhances employee productivity. Last but not least if the politicians want to stay gridlocked our stocks have learned that paying dividends insures a higher price of the stock they get for free and that pays them well also. The sector look quite bright - in the darkest of times. It is that light that will attract investors whether we enjoy the most robust of times or the darkest. Gottfrieds charts show us cycles of leesr volatility and more consistent yet increasing growth. If there is a dip in our future - I believ it is important to not lose your position and buy on any market opportunity. Low equity prices - that privide dividends when reinvested build greater wealth than high priced stocks with low dividends. The old usuals on this thread (myself included) must put away our cowboy spurs and enjoy the long term growth of compounding dividends. Boring it is - especially after what this sector has gone through. Its not a bad ride - it just may not be as frothy as it once was. I still yearn and hope for a good run up into higher valuations . It will no doubt only happen if and when we oldster know and believe it is never to happen again. I'm so bored - I think we are close.<smile> Everytime that BtB spikes a bottom and it joins the Sox monthly close on G's chart - its a pretty good time to do a little dip buying. After that enjoy the bigger dividend check. I'm getting old and life is a little boring - but I love my dividend checks.<smile> Thank you all - for the wonderful study and knowledge you all share so willingly. Bob I do miss Cary and hope he lurks.It would be a better thread if he shared his viewpoint hint hint!

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