Only a couple of weeks back, the headlines were proclaiming the death of tech. The harbinger of doom? As I recall, it might have been crummy quarterly results at IBM
Well, a few days have passed. So scratch that. The news this morning is that tech is back! Well, the Semiconductor Industry Association's (SIA) periodic chip check will be interpreted that way, you can bet your 64-bit data bus. The reality is that the SIA's tally of semiconductor spending shows a 13.2% year-over-year increase from Q1 2004, with a 0.4% sequential rise from the last quarter of 2004 and a 2.2% monthly increase from February to March.
Think we'll see a retraction/correction/mea culpa from any of those organizations that proclaimed the death of tech? (Yeah, when Satan's throwing snowballs...) Care to make odds on seeing one of those tired old headlines like "Nasdaq Rises on Higher Chip Sales?" Feel free to join me in retching if and when we do, because, as we all know, this kind of nonspecific prognosticating is of little value for individual investors. That's why I called shenanigans on the IBM news, and I'll do it again today.
There are a couple of problems here for investors to wrestle with. The most obvious is that tech does not equal tech does not equal tech. I mean, compare what's going on at fizzlingNortel
The real lesson for investors is, as always, to tune out most of the background noise that passes as financial "news." True, the increase in semiconductor buying represents a comforting trend for those who like to invest in companies that rely on such spending, but only in the most general sense. There will be plenty of tech losers to go with the winners. That's why we encourage Fools to skip the forest-watching and hang their hopes on the strongest trees.
For related Foolishness:
- Learn how to translate from Canadian.
- IBM's no bellwether, folks.
- Whatever would we do without analysts?
- Non-news got you down? Take a look at the wonderful world of bobbleheads and the beast.