The semicaps have had a nice move off their lows. I had suggested buying them pretty close to the March lows… and while I still think things can improve there, the sheer valuation trade I thought would protect me is over. At 1 – 1.5* book, the stocks are telegraphing endless woes. At 2*book, they’re telegraphing a more normalized recovery. I still do not think we are in a normal economic environment and I do not think the inventory rush in the channel is sustainable. As long as utilization rates at the foundries stay strong and memory prices stay firm there’s likely no imminent danger… but at 2* book, there’s just less cushion in my mind.
I’ve taken my profits in the semicaps.