In the name of proving that there are more opinions than
out there -- and letting them be heard on
-- let's go back to Scott Turkel, who was mentioned in this
morning's column for a few of his less-than-noteworthy picks in this column. Like Cramer, he's a trader, but unlike Cramer he watches technicals in addition to fundamentals. So, unlike Cramer, he's not nibbling at much of anything. Also unlike Cramer, he's still hoarding cash and is holding back from buying into tech for a simple reason: He believes gross profit -- revenue divided by gross margins -- are headed lower.
From his monthly letter to his investors:
"We are concerned about component shortages in commodity semiconductors. Lead times for some components have stretched from seven to 40 weeks, especially in standard logic products and certain classes of memory that are required for the buildout of wireless handheld devices, PCs, and the new digital products for the consumer market. "This is a two-pronged problem: Higher component costs reduce gross margins for equipment vendors and contract manufacturers, thus keeping average selling prices higher. Higher pricing tends to slow the rate of consumer adoption, reducing upside to revenue expectations. The deceleration in the top line, combined with gross margin pressure, is not an attractive investment opportunity in the short term. "The long-term secular trend toward a wireless, convergent voice and data world hasn't changed, but it might take one or two quarters for these shortages to abate and the margin pressure problem to be alleviated."
Meanwhile, Turkel notes that
recently cut the prices on its low-end servers. Can that mean
are close behind? (You can only wonder.) So, when, then, does Turkel think he'll start buying tech again? "I don't know," he says. "I'll let someone else grope for the bottom."
Other opinions? I'm listening.
Don't forget to check out my other column from earlier today.)
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
firstname.lastname@example.org. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.