Hi G,Don and Woody,
I'm itching to get in here with a little optimism.
The market dumped last year and recovered tremendously last October.
Having said that,we are up - but up from a drop.
Viewing the bigger longer picture semi equipment orders are down, as the general theme was second dip coming.
In past years capital was allocated irrationally and excess capacity killed pricing power.
Once bit twice shy.
We now allocate capital rationally - too many fine companies have gone away - the result of over zealous capex.
When double dip gets whispered semi companies push out orders.
Flash back from 2011 to Q1 2012 and we have Intel losing to aapl's itab processors and iphones - both of which have pioneered superior design and technology at huge margins and vastly bigger quantities than the PC cycle ever dreamed of.
But listening to the webcasts:
Intel is buildingn ot not one , not two, but three new fabs here in the USA a 12 billion Capex program for 2012.
Samsung is having a Capex of 12 billion as aapl builds a new plant in Austin (where Samsungs only USA plant makes ic's for just aapl).
Qualcomm and now close to fabless AMD guide lower because TSMC is behind in 28 nm production - feeling the pains Intel went through 3 years ago on the next generation of line shrinks and it yield challenges.
We are at a new edge of wonderful products: smaller, more powerful, more electrically efficient and all gunning for the huge market aapl has proven is out there, if you just do it with a mobile platform.
Not only is it a huge market at prices that accord huge margiins - just wait till you see the volume's once Msft all but gives away windows 8 to gain back market share and Intc sells chips that are smaller and with bigger yields than ever before with weaker margins of 64 vs 66 <smile>.
We are at the cusp of huge unit count IC levels of production and the only way they will be made, is to grab back what aapl has shown us can happen - if they do it better faster and for cheaper it will generate volumes we've never imagined.
READ THAT AS A RUSH TO THE DOORS OF SEMI EQUIPMENT MAKERS OF THE LEADING EDGE EQUIPMENT.
A RENNAISSANCE OF NEW EQUIPMENT - MAYBE NOT.
A RATIONAL ALLOCATION OF CAPITAL - AND CAN YOU DELIVER IT YESTERDAY - MORE THAN LIKELY!
Last but not least did you see the B to B !!!!
From months below 1 to a WHOPPING 1.13
Listen to the webcasts they are telling us something.
Good is coming.
Forget the real estate
Forget the oil boys
Forget the commodities
Forget the currencies.
Our sector has been out of favor for 12 years.
The companies are debt free full of cash and SURPRISE SURPRISE they pay dividends.
Best of all the orders are coming in from bigger and better survivors of the last 12 years.
The markets are greater in number and yes still Europe is weak - what else is new.
The markets are bigger in population: China India Africa not to mention Japan,and North America.
It should not be lost on us that Intels first phone chip is being introduced in India - the last bastion of strength for the outdated Rimm.
A high volume low price market.
When deglitched and yields screaming efficiency.
Nokia with windows 8 will blast iphone holders with speed and a few new features at much lower prices.
Aapl the invincible will adjust margins - hopefully faster than the did their Mac back in 1999.lol
I ramble,but I do disagree with a downturn from here.
We've come up from the depths of the credit crisis,then slipped into a double dip fear.All of which deferred Capex.
We now have new products that are huge in volumes vs the lowly PC cycle, which by the way still is doing just fine 2% growth down from 10 percent during the crisis.
Iv'e said it for decades now - a bit like a record I CONFESS.
There comes a time you need to" Know what you Know".
Semi Equipment has been deferred and is now sought after.
Huge new markets have been proven.
These ARE the times that billions should be invested and YES IT IS RATIONAL.
These are the best of times - business is good.The survivors have been growing book value all the way.
They've been buying back stock faster than the execs have been giving to themselves
THEY EVEN PAY 3-4 % IN DIVIDENDS!!
The B to B is back and it will stay there for over a year.
Yes my friends business is GOOD and GETTING BETTER.
When end user demand drives our sector it is time to buy.
Any body notice the Apple stores when they offer a new product?
The good times are back.
Last but not least - when do stocks go up in price - when no one owns them much like now.
What makes people buy a stock - fast upwaqrd price action very unlike now.
Why is there all that money on the sidelines? No fast upward price action.
Why is Amat paying a 3 % plus dividend and 15 cents over its 200 day sma.
Only investors are buying it.
We're early and the prices are the best we're going to see.
If they get cheaper - I'll buy even more.
If you are short get long
If you are long get more
Optimistic as ever,
I'm long and quite confident.
Bob |
