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Agreed, this news doesn't square with market performance. For instance, FSELX (Fidelity Select Semiconductors portfolio) mutual fund is up 43% over one year, do

Agreed, this news doesn't square with market performance. For instance, FSELX (Fidelity Select Semiconductors portfolio) mutual fund is up 43% over one year, doubling the performance of the S&P500. Top-10 holdings (68%) include Intel, Qualcomm, Broadcom, Nvidia, Micron, Marvell, ON, NXP, FLex, Commscope, so it's a fairly broad measure. For this cross-section to be performing so strongly, others must be circling the drain if indeed the industry is turning down steeply. I'm not seeing that.

totalZero 7y ago
In saying that there cannot be a turndown because stocks are rallying, you are not comparing apples to apples. Companies can circle the drain while their stock rallies. Companies can do good business while their stock gets crushed. First, people are buying equities in general because interest rates are being held low artificially by the Fed, which has been pressured by the President to do this. Second, few traders and investors understand how to differentiate semiconductor companies, so when it blows, it will all blow. People get out of crowded trades chaotically. Investors and traders, who are largely unsophisticated about the specific technologies that each company develops and markets, will punish the sector rather than choosing individual names to sell. I will say it again: most people who trade tech professionally have no fucking clue what these companies actually build. They look at numbers, watch earnings reports, and listen to buzzword-laden commentary from research analysts. Look at Apple. Their supply chain is threatened by factory shutdowns and a huge market of theirs has basically been put on ice, but their stock is near all-time highs. They haven't made a game-changing product since the days of Steve Jobs, and people usually say their value now comes from their execution. But how can you execute if your suppliers are shut down and one of your major markets is closed for business? INTC is facing tons of pressure in enterprise and PC from AMD, their 10nm has been a disaster for them, and yet their stock popped 9% on earnings due to cloud demand. It's trading near dot-com bubble levels. They are getting hurt in their competition vs TSMC on fab, and losing market share to AMD, yet their stock is like a rocket ship. Doesn't this seem weird? QCOM has been hit hard by several regulators and in a number of lawsuits for its IP bullying, it has come out and said that coronavirus is going to hurt smartphone manufacturing and sales, and yet its stock is trading near all-time highs. Don't ever confuse stock performance with company performance. Boeing stock is trading at more than double where it was when the 737 Max 8 took its first flight four years ago.
- siracusa23 7y ago
  I'm honestly extremely pleased with my iPad Pro and Airpods Pro, both are honestly impressive pieces of tech. I'm coming from an EE background, so I might not be able to really distinguish nuances in software, but hardware-wise they are impressive. I can't agree with you on the Apple perspective, and it's my subjective opinion, I might be also biased since I have a large position on APPL. However, I can agree on the idea that the stock price can be completely disconnected from the fundamentals of the company.
  - codyb 7y ago
    Apple’s most recent earnings call seems to suggest they’re doing just fine expanding into wearable accessories and monthly subscriptions as well. Seems like half of NYC has airpods when I’m walking around and in most of the stores here they won’t be in stock until March (a jump from mid February a couple of weeks ago). That could be supply chain disruption or they’re selling like hot cakes. Very satisfied with my pro pod pair post purchase as well.
- silenussays 7y ago
  Haven't made a game changing device since Steve Jobs? The Apple Watch completely dominates that product category. There is no alternative that can even compare.
  - totalZero 7y ago
    The entirety of "wearable, home, and accessories" amounted to 10.9% of revenue for the past quarter, which included Christmas, and 9.4% for all of fiscal 2019. In addition to the Apple Watch, that category includes Airpods, HomePod, Apple TV, Beats, iPod touch... Just because you like the Apple Watch doesn't mean that it has changed the way the company does business. And the fact that Apple doesn't break out gross margin for this category tells us that they aren't particularly proud of that number. Gross margin on products as a whole is about 34%. Apple wants to paint the picture that they are diversifying away from phones, which accounted for over 3/5 of their revenue this past quarter, and shifting toward services and other products. But it's one thing to repeat a rosy narrative, and another entirely to back it up with financial statements. Apple is still a phone company, and if the Apple Watch really drove profits for them, they'd break "wearables" out to its own line item, or at least show us the gross margin for "wearable, home, and accessories." https://s2.q4cdn.com/470004039/files/doc_financials/2020/q1/_10-Q-Q1-2020-(As-Filed).pdf https://s2.q4cdn.com/470004039/files/doc_financials/2020/q1/... https://s2.q4cdn.com/470004039/files/doc_financials/2019/ar/_10-K-2019-(As-Filed).pdf https://s2.q4cdn.com/470004039/files/doc_financials/2019/ar/...
coliveira 7y ago
And that wouldn't be the first time semi stocks do well right before a crash. In 2000 they did fabulously, but at the expenses of the largest number of unprofitable tech companies ever. According to some, we're following the same path.

totalZero 7y ago

In saying that there cannot be a turndown because stocks are rallying, you are not comparing apples to apples. Companies can circle the drain while their stock rallies. Companies can do good business while their stock gets crushed. First, people are buying equities in general because interest rates are being held low artificially by the Fed, which has been pressured by the President to do this. Second, few traders and investors understand how to differentiate semiconductor companies, so when it blows, it will all blow. People get out of crowded trades chaotically. Investors and traders, who are largely unsophisticated about the specific technologies that each company develops and markets, will punish the sector rather than choosing individual names to sell. I will say it again: most people who trade tech professionally have no fucking clue what these companies actually build. They look at numbers, watch earnings reports, and listen to buzzword-laden commentary from research analysts. Look at Apple. Their supply chain is threatened by factory shutdowns and a huge market of theirs has basically been put on ice, but their stock is near all-time highs. They haven't made a game-changing product since the days of Steve Jobs, and people usually say their value now comes from their execution. But how can you execute if your suppliers are shut down and one of your major markets is closed for business? INTC is facing tons of pressure in enterprise and PC from AMD, their 10nm has been a disaster for them, and yet their stock popped 9% on earnings due to cloud demand. It's trading near dot-com bubble levels. They are getting hurt in their competition vs TSMC on fab, and losing market share to AMD, yet their stock is like a rocket ship. Doesn't this seem weird? QCOM has been hit hard by several regulators and in a number of lawsuits for its IP bullying, it has come out and said that coronavirus is going to hurt smartphone manufacturing and sales, and yet its stock is trading near all-time highs. Don't ever confuse stock performance with company performance. Boeing stock is trading at more than double where it was when the 737 Max 8 took its first flight four years ago.

siracusa23 7y ago
I'm honestly extremely pleased with my iPad Pro and Airpods Pro, both are honestly impressive pieces of tech. I'm coming from an EE background, so I might not be able to really distinguish nuances in software, but hardware-wise they are impressive. I can't agree with you on the Apple perspective, and it's my subjective opinion, I might be also biased since I have a large position on APPL. However, I can agree on the idea that the stock price can be completely disconnected from the fundamentals of the company.
- codyb 7y ago
  Apple’s most recent earnings call seems to suggest they’re doing just fine expanding into wearable accessories and monthly subscriptions as well. Seems like half of NYC has airpods when I’m walking around and in most of the stores here they won’t be in stock until March (a jump from mid February a couple of weeks ago). That could be supply chain disruption or they’re selling like hot cakes. Very satisfied with my pro pod pair post purchase as well.
silenussays 7y ago
Haven't made a game changing device since Steve Jobs? The Apple Watch completely dominates that product category. There is no alternative that can even compare.
- totalZero 7y ago
  The entirety of "wearable, home, and accessories" amounted to 10.9% of revenue for the past quarter, which included Christmas, and 9.4% for all of fiscal 2019. In addition to the Apple Watch, that category includes Airpods, HomePod, Apple TV, Beats, iPod touch... Just because you like the Apple Watch doesn't mean that it has changed the way the company does business. And the fact that Apple doesn't break out gross margin for this category tells us that they aren't particularly proud of that number. Gross margin on products as a whole is about 34%. Apple wants to paint the picture that they are diversifying away from phones, which accounted for over 3/5 of their revenue this past quarter, and shifting toward services and other products. But it's one thing to repeat a rosy narrative, and another entirely to back it up with financial statements. Apple is still a phone company, and if the Apple Watch really drove profits for them, they'd break "wearables" out to its own line item, or at least show us the gross margin for "wearable, home, and accessories." https://s2.q4cdn.com/470004039/files/doc_financials/2020/q1/_10-Q-Q1-2020-(As-Filed).pdf https://s2.q4cdn.com/470004039/files/doc_financials/2020/q1/... https://s2.q4cdn.com/470004039/files/doc_financials/2019/ar/_10-K-2019-(As-Filed).pdf https://s2.q4cdn.com/470004039/files/doc_financials/2019/ar/...

coliveira 7y ago

And that wouldn't be the first time semi stocks do well right before a crash. In 2000 they did fabulously, but at the expenses of the largest number of unprofitable tech companies ever. According to some, we're following the same path.