Zeev's Turnips Patch-No Politics (ZEEV)

[ogm]

I think semis are showing temporary strength beacause a lot of money coming out of other sectors and are looking for home, and INTC, CSCO, DELL reports where OK. Nothing spectacular, just OK.
However enterprize spending isn't spectacular by any stretch. Notice how DELL has specificaly stressed the strong international sales in their earnings release. Wonder why is that ?
And we already know that most of the world is starting to struggle. UK and Europe are as close to entering a recession as ever.

Last quarter's solid INTC CSCO and DELL reports are only temporary. And backward looking. I wouldn't bet a dime on their forward guidance.

Pricing pressures in the semiconductor industry are still huge. Stocks are still trading at incredibly high premiums, and we still have options expensing going forward, though it got delayed a little. This industry is as commoditized and cyclical as anything else, and on top of that its very labor intensive. People are still willing to pay high premiums for no growth and cyclicality. Glory days of sexi names like BRCM are still on everyone's mind. Not gonna last.

This rally in semis is just another selling opportunity, IMO.

And of course if the general market will keep falling apart, nothing is safe.