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Politics : Formerly About Applied Materials

AMAT 261.26

-0.2%

12:36 PM EST

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From: michael97123	2/10/2001 11:58:32 AM
	Read Replies (1) of 70976

Cisco thread taken over by angry and mean bears. Here at AMAT resignation and depression have set in. I guess that the give back of the January rally after the end of last years nasdaq debacle is very disheartening. As a long termer philosophically I have become quite nervous about the markets going forward as well. My belief is that we will trade in the 2k-3k range on nasdaq for most of this year. I believe there will be another 1/2 point interim cut next week or the week after. I believe in the "Don't fight the fed" adage which i regret I didnt follow last year. I believe lower interest rates will spark home buying and car buying going forward. More importantly lower rates leads to refinancing which traditionally pulls cash out for home improvements. Also junk bond market is robust again and that's where the clec money comes from. From this I conclude that the layoffs we are now seeing in tech are tactical and temporary. The economy shockingly fell off the cliff in nov,dec, and jan and probably february as well. We might find that the lower rates and its effects may cause a similar "cliff" effect the other way perhaps much sooner than the pundits expect. And the statements of Corrigan, Chambers and perhaps Morgan on tuesday are said as much to set the bar lower for future stock appreciation. As a long termer what gets me thru these times is to try to view the US and world economies 5 years out. There is always a 1 in 10 shot that the economy will get into a milder 1929 or 1970's kind of crisis or some brand new variety but I do believe that there is a 90% chance that the US Fed along with the rest of the world will sidestep these potential pitfalls and climb out of this period (a harder soft landing) sooner than expected. And later in the year the market should begin to realize that certain stocks that were being priced as potential lucents deserve some of their old multiples back. 2 years out we will be back to old highs. The real trick is to pick the winner when the economy recovers before the herd. The biggest and best tech companies are off on average 50-67%. Some were higher multiples like cisco, sunw ,and oracle. Some are admittedly cyclical like amat, txn, intc, and lsi. The above is a rambling view of things from an oldtimer that has been thru much of these cycles before. My gut tells me we will have a second half recover because it is clear to me that both that fed and the Bush administration are fully committed to doing whatever necessary to make this so and not for political reasons but because they know just how much the world economy and thus the future of world peace and international democratization is at stake here.

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