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Technology Stocks : LSI Corporation

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To: uu who wrote (12259)	5/10/1998 8:44:00 AM
From: shane forbes	Read Replies (1) of 25814

Addi: ---- First re: AMAT and semi-equips: It is no wonder that companies release these kinds of "surprises" on Friday evenings and not Monday mornings! Gives everyone some time to guess and 2nd guess and triple guess their decisions in the next few days. My first inclination was "ha! I knew it - business is sucking big time for the semi-equips - perhaps even worse than 1996". That would imply immediate selling on Monday morning. After all if it turns out to be worse than 1996 then AMAT and esp. all the big caps in the semi-equip area have a long long long way to fall. Then again after a couple of nights of sleep now I'm not so sure of the immediate impact. It really depends on the expectations built into the current price. Were most of the people in AMAT right now expecting an earnings surprise? Very unlikely. Are most of the people in right now value investors who will hold regardless? Unlikely - too early. Are most momentum investors? Very unlikely. [Then again what the heck was the SB analyst doing a few days ago???] Putting it all together I would figure an initial thumping to 32 and maybe a slow decrease to 28 (or a fast decrease to 26 if the earnings release is sad as I expect it to be - one thing that I like about AMAT is that they do no cover up crap in their releases) and then more violently lower when the market tanks or any other macro factors take hold. Now if Fideity and their ilk are still in these stocks forget it - they will dump and dump severely and you will have AMAT under 30 by Wed. evening - guaranteed. I just don't follow AMAT too closely anymore to get a feel for the reaction. Over the intermediate term the range of 32-38 should be knocked down to say at least 24-30. And then lower if things turn out to be really really bad or the market tanks. [The one +ve here is that the market may be happy with the cost reductions. 10% of labor costs is quite significant. If the stock goes up as a result of this you can bet it will be met with waves of selling.] --- Shane.

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