On the Eve of Earnings
We are on the eve of a lot tech earnings over the next few weeks. ADTN reported last night and hosted their call this morning. Guidance was in line and the business was good, but not good enough to sustain the current multiple if you have been a recent buyer. Look at a 10Y weekly on the company.
Any questions? I did not like so, but in case you missed the point of the chart it tells me that the multiple got stretched and it was prudent to sell as the price level was in an abnormal position.
Decisions, decisions, decisions…what should a tech investor do? As for concerns we have a lot to choose from: US Govt debt ceiling fight, end of QEII, Japan nuclear mess, consumer spending, unemployment and looming confrontation on sovereign taxes. From a macro perspective it is hard to be excited and easier to be bearish. Maybe sell in May and go away is a prudent action.
Here is my first attempt at setting up the first portfolio post of the new blog which is a work in progress. As I have more time to post, I will expand on the details in the portfolio section, but to start I will look at the portfolio from a sector basis and add equity detail in the sectors in the future. The general approach is 14 sectors composed of ~65 sub sectors and ~800 equities. Today I will start with the 14 primary sectors.
|Semi Equipment / Process||29||NEUTRAL|
|Semiconductors – Legacy||25||SHORT|
|Semiconductors – Core||58||LONG|
|ODM, EMS, Disty, Photonics||42||NEUTRAL|
|Hardware – Commercial||29||SHORT|
|Hardware – Personal||24||LONG|
|Networking – Infrastructure||53||LONG|
|Clean Tech – Solar, Power, Water||133||SHORT|