Is That It?

The Philadelphia Semiconductor Index (SOX) is on pace for a gain of just under 5% this week, which by any measure should be considered a great week. Be honest, though, if you hold any of these stocks in your account, have you looked at some of their performances this week and thought to yourself, “Is that it?”

Stocks like Marvell (MRVL), Applied Materials (AMAT), and Taiwan Semi (TSM) are up between 3% and 4% this week, but after gaining anywhere from 40% to 140% YTD, the gains this week seem ho-hum.

A look at weekly SOX performance since the March low illustrates the trend. Yes, the SOX is up 4.7% this week, but relative to recent history, it ranks as the third-worst weekly performance in the last nine. Sure, this week may not look like much compared to the last two months, but the last nine weeks have been a historic run of strength for the sector. As a case in point, if it were any other week before March 30th, it would have been the best week of the year!

After such an incredible run like the last nine weeks for the SOX, it’s easy to get jaded and expect the recent trend to become the norm. It won’t. Just like the Knicks will lose again at some point (hopefully not until next season), the SOX won’t keep going up. Eventually, you’ll look back on this stretch with nostalgia, so soak it in while it lasts, even if it is “only a 4.7%” gain.