Saturday, March 14, 2015

I fear that the whole PC industry is over valued. [CY]

In my house I have many PCs, laptops, tablets.  I think with the low prices that have been available for some time now that most of the people who have money to spend on such things have spent it and are good for, oh, say, 3-4 years.  Seriously, if I did not buy another computing device for 3+ years then it would not affect me in any way.  Why?  Because they just keep selling the same thing over and over again with only incremental actual value add.  Furthermore, they just keep investing in more and more infrastructure for the automation of even more of same.

The PC industry is full of visionless dullards running the show right now.  They are more focused on how they make money than how they provide new value to their customers.  They have forgotten that their customers are their lifeblood.  They think people will just keep spending and spending on the same of $hit endlessly.  Microsoft is in the same boat with its software, delivering gobs of new user interfaces (with each successive release effectively messing up the best features of the prior release) without adding any new functionality that really adds value.  Someone please tell me what I cannot do on Win XP that I can do on Win8.1.  If the only answer is "be locked into the cheezy windows app store" then I don't see that as any kind of benefit.  It is just another attempt to entrap and lock in the user.  This will eventually fail because nobody is looking out for the customer.  They are all too inwardly focused.

In any case I came across another chart of false optimism that is worth sharing due to the dramatic crash that the wave count says will soon happen to it.  that chart is none other than Cypress Semiconductor, ticker: [CY].  As you can see from the chart below, CY had 5 waves up into 2011 and then 5 waves down into 2013.  Since then it executed an expanded flat retracement to the 50 fib.  In not too many weeks this will most likely reverse hard and head down into a big C wave as shown.  Target price is $2.  If you own CY, don't fight the ticker and pay little attention to the recent positive news because that is nothing but a distraction.   CY owns 6 semiconductor fabs in Minnesota and those are capital intensive beasts.  When the pump is on, those with fabs get monster rich.  But when the deflation hits, revenues fall off but costs don't.  I know from my years at AMD that fabs are essentially a fixed cost item.  Get rid of all the employees working there and you still have 70% of the cost!  If you try to sell a fab in a depression you will get 5 cents on the dollar because of this.  Nobody wants fixed costs when revenues collapse.

Interestingly, if wave C plays out at the same rate wave A did then it will bottom around the end of 2017 which is right when my Illuminati warning says the crash will have played out and the global economic system will collapse to the state it was at in the 1800s.  By the way, that could simply mean an end to fractional reserve credit and the remonification of gold so don't take that to mean I think everyone goes back to living in a log cabin with an outhouse.  Just like I always warn everyone not to associate the share price with the validity or value of a company, don't associate the fake money system with the self worth of America or the American people.  A collapse of the fake money supply will kill Wall Street which I view to be a healing, albeit a painful one.

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