Semi Sector 9+ Months On…

On November 21, 2017 we noted…

Semi Equipment Spending Record, 2018 Growth, But…

With the key being the “but… “

Per that post…

What got me checking into the SEMI data is a goofy MarketWatch article featuring a fund manager who owns the FAANG type stocks at 30 multiples, but has found relative value in AMAT and LRCX, the two Semiconductor Equipment stocks that I was bullish on 1.5 years ago. I know, I know… I sold too soon and that is my issue and I have to own it. But the point is that it was hard to buy then, unlike now.

Fund manager looks beyond ‘FAANG’ stocks and finds even bigger winners for 2018

I am not making fun of somebody just to be a dick about it. We all make mistakes. But the mainstream media with its eyeball harvesting headlines is downright dangerous to the casual observer who believes most of this crap to be actionable.

So here’s the updated status of AMAT and LRCX, which I highlighted in the November post. The blue shaded areas show where the stocks were when the fund manager let you in on his “even bigger winners for 2018”.

After my initial galled response to this article and being ever the geek I began using AMAT & LRCX (both former and possibly future long positions of mine) as a potential bearish cycle indicator for the US economy.

But do you know what? These are great companies and our friendly fund manager is probably going to be right one day after he takes his clients on a round trip of -32% and -26% (and counting).

Personally, I like this chart from Custer Consulting (circled markups mine) by way of SEMI. It looks like an interim down cycle within a longer positive trend. Just maybe a buy will come about on AMAT & LRCX when the fund manager pukes and/or MarketWatch puts out a real bearish article on Semi Equipment.

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