How a nightmare from my hedge fund days informs my current market view
My shoulders were hunched. I didn't know if I wanted to cry, throw a water bottle at someone, or maybe both. The market had closed, maybe an hour and a half ago, and out of the corner of my eye, I had spied the...
S&P 500 (SPY) Temmuz'da (DÜŞÜK) 730 Doları vuracak mı?
Here is a story making headlines in the economy: My shoulders were hunched. I didn't know if I wanted to cry, throw a water bottle at someone, or maybe both. The market had closed, maybe an hour and a half ago, and out of the corner of my eye, I had spied the unthinkable on the screen: "Western Digital sees fourth quarter prelim well below estimates.
I felt faint at my standing desk; I began to crumble, soon to hit the floor. But a split second before impact, I woke up, 2:47 a. , the same time I always came to at that infernal Cramer & Co.
Economic Details
Do you know that this nightmare occurred just this past Sunday night? I was recalling something that happened 37 years ago, when we owned 4. 9% of Western Digital, and it blew up in my face, ruining my year.
I started Thursday's July Monthly Meeting of the CNBC Investing Club with Sunday's nightmare because you need to know that such a scenario is playing out again all over the Street, just as it did almost four decades ago. The component stocks, Western Digital , Seagate , Sandisk , and Micron , as well as the just-joined SK Hynix , have had tremendous runs. Western Digital is up more than 180% this year alone, and the holders all fear that nightmare.
They fear it because that's what has always occurred. There's always a boom followed by a bust with these stocks, and the bust will wipe away whatever you've made and then some. Or at least it used to.
Analyst Views
These semiconductor parts makers had always been sink-or-swim. We have never had a cycle that lasted as long as this one. The companies and their suppliers, like Applied Materials or Lam Research , and their customers, Dell , Hewlett Packard Enterprise , or their more nimble cousins, including Corning , Qnity , and Intel, as well as others like Arm Holdings and Advanced Micro Devices , had always gone up quickly but had then fallen hard, much harder than expected.
It's been ineluctable, as foregone as when Western Digital pre-announced oh so many years ago, because the cycle had turned without my seeing it coming. This time, though, we are discovering that we have to unlearn forty years of knowledge. We have to erase the muscle memory.
As preposterous and reckless as these words are supposed to be for investing, "This time it really is different. " Contrary to everything we know, the boom stocks are no longer going bust. They just keep booming.
Economists are analysing what the news means for the markets.
