The title of this article implies that we are looking at companies that have e in the first place. Each of these stocks has a slightly different story, but all are susceptible to certain expectations overhangs that we have built up for them over the past 2 years. A quick review of Asian valuations leads one to conclude that we still have a long, bitter road ahead. Let s start with the semiconductor stocks. Other producers of consumer electronics are similarly pessimistic.
Semiconductors are commodities, just like pork bellies and wheat.
Similarly, the foundries that make them have neither intellectual property, nor any particular competitive edge over one another, save for access to the capital needed to build the next fab. Unfortunately, this is seldom the case and will certainly not be the case in 2001 and 2002. China of course. The investment dollars currently pouring into Chinese foundries will ensure that semiconductors are in surplus for at least the next three years. China will deflate the rest of the world once more, as it has done in the past with textiles, computer monitors, and plastic toys.