My Current Investment Theme, for Idiots

CNBC is in the process of humiliating themselves, again, by way of highlighting “Nigerian investment opportunities.” From my vantage point, munitions and law enforcement seem like great “opportunities” there, to hell with building out an electricity grid.

As you can see, the market is selling off, which means, incidentally, all of the bears will be pounding their homo drums today, praying to Lucifer for a little taste of Armageddon. Unfortunately, for them, any and all sell offs will be met with frenetic buying, due to the idea of future growth.

Until proven wrong, my theme will be to buy “early cycle” tech names, due to stories like this.

If the semiconductor foundries ([[TSM]], [[UMC]], [[CHRT]], [[SMI]]) are rebounding, due to inventory shortages, I want to be long the companies who supply them or have a hand in the packaging and testing of wafers.

Such said companies include: [[AMKR]], [[KLIC]], [[ASX]], [[ATE]], [[SPIL]], [[TQNT]], [[CDNS]] and [[TER]]—just to name a few.

In addition, companies who deliver electronic parts to the foundries are worth investment, including: [[AVT]], [[ARW]], [[AXE]] and [[NUHC]].

After that, there are a myriad of stocks that may benefit from higher capacity utilizations. However, for now, I will stick to the early cycle names.

Separately, there is a boom in LCD sales, particularly in China. In my opinion, the best way to play it is through [[AUO]] (they make the LCD’s) and [[GLW]] (they provide the glass substrates).

And, finally, I am very interested in playing the 4g rollout, due to the emergence of smart phones. So you know, at the present, smart phones ([[AAPL]], [[RIMM]], [[PALM]]), represent less than 15% of the overall handset market. Without a doubt, that number is set to double or triple. A way to play the touch screen technology is through [[CY]], [[ATML]] or [[SYNA]]. The best way to play the internet connectivity aspect for handsets is via [[STAR]] and [[ATHR]].

As for the actual infrastructure, in my estimation, the best plays are [[ALU]], [[ERIC]], [[STAR]] and [[CIEN]]. If you want to roll dice, outlier plays include [[RFMD]], [[LVLT]], [[SONS]], [[ARUN]], [[AKAM]], [[EQIX]], [[SDXC]], [[SOAP]], [[VRGY]] and [[CAVM]].

Two things to note, [[BRCD]] appears to be taking share from [[CSCO]] and [[SONS]] may acquire the distressed assets of Nortel, which may be a huge win for them.

As an aside, LED technology is finally taking off. The big ticket items will come in the form of infrastructure contracts, for LED street lamps in China and possibly here in the states. Unfortunately, most of the LED plays trade Taiwan. Here in the states, there is one company worth investment, if you are interested in playing the LED craze: [[CREE]].

And, every once in awhile, I like to invest in companies with kick ass technologies that offer outsized gain opportunities. Two companies that come to mind: [[OVTI]] and [[ENTR]]. Do your own research, liver lips.

That’s my thesis and I’m sticking to it.

As you know, “The Fly” has been delving into the Dark World of Small Crap, as of late. I will have you know, the reason for this is because of my “calculator brain” and 155 IQ. Small caps always outperform big caps, coming off of a market bottom. The trick is knowing when to put the small cap crack pipe down, in exchange for bigger names. My sense, there is another 10-15% left in this market run. As a result, I deem it necessary to be long.

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