Expensive Chips

The following table comes from Fred Hickey’s High Tech Strategist newsletter, courtesy of this weekend’s Barron’s. Put bluntly, chips aren’t cheap.


I pointed out something similar in a column this week for RealMoney. I ran a graph there of Apple Computer’s price/sales and price/earnings multiples over the last twelve years as its sales growth has slowed.


Entertainingly, and almost certainly paradoxically, the multiples have climbed as growth has slowed, suggesting that investors Apple value the (current) low-growth Apple more than the (old) high-growth Apple. Who would have thought?


  1. I agree 100% with Mr. Hickey’s observation regarding the speculative excesses of the semiconductor stocks as reflected in Mr. Abelson’s barrons article and was so impressed with your coverage that I have listed it on my blog: http://journals.aol.com/isemanjim/BuyFearSellGreed
    Thank you for covering the speculative excesses. I encourage you t reference Smith Barney’s Tobias Levkovitch’s “early call” on the downgrade in the semi sector on 11/03: http://www.globetechnology.com/servlet/ArticleNews/TPStory/LAC/20031226/RTIPS26-2/TPTechnology

  2. Thanks for the note. I’ll scan the pieces.

  3. You may want to check out my blog called “Buy Fear, Sell Greed” which currently focuses on the developing second Tech Bubble: http://journals.aol.com/isemanjim/BuyFearSellGreed
    I hope it’s OK, I reference your excellent work.
    Tobias L. is also mentioned in the 2/14/04 WSJ on the importance of re-allocating to more defensive Large Cap. I’ll try to forward some of his latest research.
    Keep up the great work!