Second bright spot in a week: CMC Materials

As my portfolios get pressured by the market’s fear of a Fed trying to stuff the inflation it created back in the bottle, I’ve had a second positive surprise in the last week.

First was the Kinross buyout of Great Bear Resources (noted at end of the article) and today we have CMC Materials stock (CCMP) getting taken out by Electronic Materials play Entegris (ENTG). Doink, 25% gain today and 27% overall on what was initiated as a bottom feed situation.

CCMP is one of my ‘picks & shovels’ Semiconductor sector stocks as I’ve cast the NFTRH view out beyond Semi Equipment stocks like AMAT, ASML, KLAC, etc. The Equipment stocks logically led the cycle because they are the solution to the Semi supply/demand bottlenecks. But looking ahead to 2022 – if the Fed does not blow the market’s gasket with its hawk version of the ongoing macro Kabuki dance – I’ve expected the play to fan out to the chip makers (e.g. former long QCOM, since sold) and picks & shovels (e.g. CCMP, ENTG and others in the Materials, Test Equipment and services food chain).

So yeah, I am getting roughed up to a limited degree on the balance of equities I hold (with lots of cash in hand in order to remain strong) overall, but having patience with Great Bear (long-term) and CMC Materials (more recently) has paid off and helped me stay mentally healthy and balanced in the face of the Fed and what’s ahead.


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