Raw Greed update

Posted on January 22, 2006 , filed under Stocks | Print This Post

I expect shares of TSM, Taiwan Semiconductor Manufacturing Company Limited to rebound following the company’s 4th quarter 2005 earnings report, set to be released on January 26th, 2006. I expect UMC, United Microelectronics Corporation to follow in suit with TSM. I believe the recent drop in share price for TSM and UMC, is a result of the disappointing earnings INTC, Intel Corporation, posted for its 4th quarter of 2005. Analysts have interpreted Intel’s disappointing results as an indication of weakness in the semiconductor industry. While Intel is the 900lb gorilla of the semiconductor industry, I believe the drop in revenue for Intel is more a result of AMD taking away market share from Intel than a sign of weakness in the semiconductor industry. There is no clearer indication of strong near term revenues for TSM and UMC than the utilization percentage for both companies fabrication plants. Both TSM and UMC are approaching 100% utilization rates.

In retrospect, I should have sold my position in NT, Nortel Networks Corporation and LU, Lucent Technologies, Inc. when I saw indications of an overheated market.

I believe BGO, Bema Gold Corporation should hit $4 if gold can break $570 by the end of the month. BGO reached as high as $3.85 on January 17th, 2006, when gold was trading around $560. Gold is currently trading at $553.60.

I am currently still in Asia and I expect to return in about 2 weeks. I will resume daily updates on Raw Greed at that time. I will continue to update Raw Greed remotely while I am travelling.

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