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The Great Tech Wreck of 2008? (taken from the "Seeking Alpha" site)


The Great Tech Wreck of 2008?
posted on: February 10, 2008 | about stocks: CSCO / GOOG / INTC / MSFT
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The high-tech companies of the S&P 500 last quarter turned in “the best performance of any sector in the market“.

Yet the sector that performed the best in this case has also of late turned in “We will have more rounds“.

Round Two may be around the corner. People have been increasing credit-card debt. “Round Two will be credit-card problems“.

Intel is in some ways emblematic of what has happened to tech. Intel’s (INTC) net income rose 51% last quarter, yet its shares sold off more than 12%.

Three is a magic number, so Google (GOOG) and Apple (AAPL) were similarly punished. You can prove anything with statistics.

Microsoft doesn’t count. Microsoft (MSFT) reported stellar results, but also offered strong guidance going forward, unlike most tech companies, which only posted strong results but offered softer guidance. Nevertheless, Microsoft shares waffled up and down the day after reporting. It seemed at the time “an ominous portent“.

Rationality did not return to the market until Cisco (CSCO) reported results for the December quarter. Cisco turned in some terrific numbers. However, it too offered some soft guidance going forward. Most everyone expected a tech wreck the next day – "stocks don’t trade on what companies have done, they trade on what they are going to do."

The tech wreck however never happened that day. Or it hasn’t happened yet. Knock on wood.
Phil Coffman
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