Go to Jeff Salisbury LWGate Home Page.From: Eric Jaenike <ericjaenike@yahoo.com>
Subject: [CANSLIM] OT 8
Date: Tue, 29 Oct 2002 09:29:06 -0800 (PST)
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- --0-615917884-1035912546=:84629 Content-Type: text/plain; charset=us-ascii Eric Jaenike <ericjaenike@yahoo.com> wrote:Date: Mon, 28 Oct 2002 08:09:25 -0800 (PST) From: Eric Jaenike Subject: More shtuff To: Anurag , Dale Dumaw , Chris Jaenike , Eric Jaenike , William Jaenike , Vitaliy Katsenelson , Trish McNamara , Sean Mullett , Fritz Reichardt Couple of other quick data points, and a few insights. CHTR, one of the semiconductor industry's top 3 manufacturers, announced Thurs night that capacity utilization was down to a stunning 39%. I almost fell over when I saw that. Worse than even I thought possible, and I know that TSCM is going to 50% utilization by the end of the year. Insight Enterprises (NSIT), a reseller of computer gear, also lower 4Q rev. and earns. Also of note, of course, were the durable goods orders reported Friday a.m.. Notably, nondefense capital goods orders, ex-aircraft, were down a startling 6.6%. While the number is very volatile, it is yet another disconcerting data point. Of course, since this rally has nothing to do with the fundamentals, the markets closed up on the day (and do I need to point out that tech led the way? Probably not.) I also want to point out something about this recent reporting period. I don't have as much hard data as I'd like (if someone does, please forward it to me), but as I understand it, earnings have come in kinda/sorta OK relative to expectations (excluding tech). However, revenue growth has been nonexistent. Earnings have been OK because of cost cutting. We are done with that benefit, and I think earnings are going to be substantially worse going forward. Of note also, of course, is that the refinancing benefit has peaked, which bodes ill for consumer spending going forward, and thus earnings going forward, especially in retail. MU has rallied 56% in the past 3 weeks, and now trades at a 21 p/e on 2004 expectations (2003 loss expected at $.58). Of course, those estimates are probably too optimistic. Hmmm, wonder if that play will work out in the long run. Great run we're having in the indices though, wouldn't you say? Party on, Garth! Another potential threat comes from credit derivatives. This is another topic I'm still working to get my arms around, so if anyone has good info, please pass it along. Bond holders generally feel secure because they own credit insurance. However, there is serious risk associated with that credit insurance, as the underwriters might be unable to meet their obligations should a number of things go wrong at once. A severe contraction in the credit markets could be extremely problematic. (Note how corporate spreads have not tightened during the recent run in the equity markets). For more on potential derivates problems, look at CI and its implosion Friday. I think this market is painting a clear picture about what is going on. As I said before, its just a question of when, not if. Happy hunting, Eric PS As I write this, KLAC up $1.35 on the day, and has rallied 38% since its low in early Oct. Truly pathetic. - --------------------------------- Do you Yahoo!? Y! Web Hosting - Let the expert host your web site - --------------------------------- Do you Yahoo!? HotJobs - Search new jobs daily now - --0-615917884-1035912546=:84629 Content-Type: text/html; charset=us-ascii <P> <P> <B><I>Eric Jaenike <ericjaenike@yahoo.com></I></B> wrote: <BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid">Date: Mon, 28 Oct 2002 08:09:25 -0800 (PST)<BR>From: Eric Jaenike <ERICJAENIKE@YAHOO.COM><BR>Subject: More shtuff<BR>To: Anurag <ANURAG@LCPARTNERS.COM>, Dale Dumaw <DDUMAW@INDRA.COM>,<BR>Chris Jaenike <CJAENIKE@SMRH.COM>, Eric Jaenike <ERICJAENIKE@YAHOO.COM>,<BR>William Jaenike <WJAENIKE@AOL.COM>,<BR>Vitaliy Katsenelson <VITALIY.IMA@USA.NET>,<BR>Trish McNamara <TRISH@CHERRYCREEKINVESTMENTADVISORS.COM>,<BR>Sean Mullett <SRMULLETT@EARTHLINK.NET>, Fritz Reichardt <REICHF@AOL.COM><BR><BR> <P>Couple of other quick data points, and a few insights. CHTR, one of the semiconductor industry's top 3 manufacturers, announced Thurs night that capacity utilization was down to a stunning 39%. I almost fell over when I saw that. Worse than even I thought possible, and I know that TSCM is going to 50% utilization by the end of the year. Insight Enterprises (NSIT), a reseller of computer gear, also lower 4Q rev. and earns.</P> <P>Also of note, of course, were the durable goods orders reported Friday a.m.. Notably, nondefense capital goods orders, ex-aircraft, were down a startling 6.6%. While the number is very volatile, it is yet another disconcerting data point. Of course, since this rally has nothing to do with the fundamentals, the markets closed up on the day (and do I need to point out that tech led the way? Probably not.)</P> <P>I also want to point out something about this recent reporting period. I don't have as much hard data as I'd like (if someone does, please forward it to me), but as I understand it, earnings have come in kinda/sorta OK relative to expectations (excluding tech). However, revenue growth has been nonexistent. Earnings have been OK because of cost cutting. We are done with that benefit, and I think earnings are going to be substantially worse going forward. Of note also, of course, is that the refinancing benefit has peaked, which bodes ill for consumer spending going forward, and thus earnings going forward, especially in retail.</P> <P>MU has rallied 56% in the past 3 weeks, and now trades at a 21 p/e on 2004 expectations (2003 loss expected at $.58). Of course, those estimates are probably too optimistic. Hmmm, wonder if that play will work out in the long run. Great run we're having in the indices though, wouldn't you say? Party on, Garth!</P> <P> Another potential threat comes from credit derivatives. This is another topic I'm still working to get my arms around, so if anyone has good info, please pass it along. Bond holders generally feel secure because they own credit insurance. However, there is serious risk associated with that credit insurance, as the underwriters might be unable to meet their obligations should a number of things go wrong at once. A severe contraction in the credit markets could be extremely problematic. (Note how corporate spreads have not tightened during the recent run in the equity markets). For more on potential derivates problems, look at CI and its implosion Friday.</P> <P>I think this market is painting a clear picture about what is going on. As I said before, its just a question of when, not if.</P> <P>Happy hunting,</P> <P>Eric</P> <P>PS As I write this, KLAC up $1.35 on the day, and has rallied 38% since its low in early Oct. Truly pathetic.</P> <P><BR> <HR SIZE=1> Do you Yahoo!?<BR><A href="http://webhosting.yahoo.com/">Y! Web Hosting</A> - Let the expert host your web site</BLOCKQUOTE><p><br><hr size=1>Do you Yahoo!?<br> <a href="http://rd.yahoo.com/careers/mailsig/*http://www.hotjobs.com ">HotJobs</a> - Search new jobs daily now - --0-615917884-1035912546=:84629-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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