Nothing Semi About It:

In an obviously very fragile environment for technology, besides the start of 2023, few sub-sectors within have provided relief. Renewable energy equipment, a decorative way of saying solar, has been the lone bright spot, pun intended. Electrical components and equipment plays have attempted to do their part with names like JBL SANM and FLEX all up handsomely in the last one-year period. But most of the limelight within technology emanates from the software and semiconductor groups. And from the PRICE chart comparing the two below it can be easily seen that one should be overweight the SMH. On a YTD basis, the SMH is higher by 22%, almost doubling the return of the IGV. And one can also see presently the SMH is acting like Secretariat, “widening now”, and distancing itself from the lagging software group. Many would say there will be a mean reversion, which will occur at some point but I say stick with what’s working and displaying strength.

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