August 27, 2003

Let's Play Find the Fundamentals

You're not supposed to get emotionally attached to your trades. And I'm not. But I did establish a put position in a major semi-conductor index in my options service yesterday. Seeing the kind of pablum below is a little aggravating...more so than normal. Here's the quote, courtesy of " Harris Nesbitt raises chip sector rating to 'positive' ($SOX, BRCM, IRF, MCHP, TQNT, RFMD, SWKS) by Tomi Kilgore NEW YORK (CBS.MW) - Analyst Ambrish Srivastava at Harris Nesbitt Gerard raised his rating on the semiconductor sector to 'positive' amid growing confidence in the continued improvement in industry fundamentals. Srivastava believes that besides all the positive macroeconomic data, increases in average chip selling prices have been holding, suggesting the 'relentless' erosion in prices may have finally ended. Among individual companies, Srivastava upgraded Broadcom (BRCM), International Rectifier (IRF) and Microchip Technology (MCHP) to 'outperform' from 'neutral,' and RF Micro Devices (RFMD), TriQuint Semiconductor (TQNT) and Skyworks Solutions (SWKS) to 'neutral' from 'underperform.' The Phlx Semiconductor Index ($SOX) tacked on 0.6 percent despite losses in the broad market. " What positive macroeconomic data? How has the erosion in chip prices possible again? This in a world of massive productive overcapacity? Where's the evidence that final demand for chips is picking up? Hmm...maybe it's there. But it sure as heck isn't proven in this kind of article. Remind me of what the difference is between this and flat out stock promotion...


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