Tech, where the elephant is headed

This morning, Intel (INTC) raised guidance by a range that still overlaps previous estimates. Nonetheless, this coupled with news that Apple (APPL) had sold its millionth iPhone sent Nasdaq futures screaming higher pre-opening in the U.S. The news from Apple came just a few days after slashing its price on the gadget by a mere 50-percent. Just imagine how robust sales might have been had they simply given them away? Higher guidance from Intel, ironically, did nothing for its shares closing lower on the day. Yet, ignoring the curious non-starter in shares of Intel (lets see the balance sheet), folks seemed to extrapolate the Intel guidance across the rest of the sector in spite of hearing from both National Semi (NSM) and Xilinx (XLNX) late last week of quite the opposite…Countrywide Financial (CFC) broke below Bank of America’s (BAC) strike price, $18/share, on the $2-billion private placement convert done a few weeks ago. Remember, shares of Countrywide saw an initial spurt above $24/share on that news. I still remember Bob Pisani squeaking like a little girl that night as he sat in for Larry Kudlow….. British billionaire Joseph Lewis whose fortunes were made in catering businesses and currency trading has taken a 7-percent stake in Bear Stearns (BSC), or an investment of roughly $860 million. Its interesting how news such as this is almost always construed as being what the “smart money” is doing. Lewis is ranked among the 500 richest persons in the world. I’m pretty confident that much of these people on this list can credit luck as being a significant factor in amassing a good part of their fortunes. It’s important in this game not to confuse wealth for brains. I've seen time and again sickeningly wealthy folks do sickeningly stupid things with bits of their wealth and after it goes awry, they're still sickeningly wealthy. Anyone that has built a fortune in paper assets might not be as smart as previously thought. But that remains to be seen. Again, the rallying cry is “tech, tech, tech!!!” And just as none of these folks were capable of connecting the dots from egregious lending standards, to housing bubble, to popping of said bubble, to subprime defaults, to an eradication of said lenders; these same folks seem to have decided that there is no need to extend this logic beyond this point. However, from my vantage, buying tech is buying the giant hole where the elephant (recession) is headed.