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Politics : Formerly About Applied Materials
AMAT 328.51+1.9%Feb 2 3:59 PM EST
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To: Proud_Infidel who wrote (4557)5/15/1997 10:12:00 PM
From: Dennis G.   of 70976
 
Brian, I agree there is much better potential in the small caps right now.
Those fund managers are paying an unbelievable premium for "bigness".
Do they really believe that they can all exit these big caps at the same
time without taking a big loss? That's what will happen in the event of a
major meltdown. And absent a meltdown, why should small companies
with better valuations be more of a risk? It seems to me that their only
real concern is to keep their job by not underperforming. So they ape
each other and jump on the same few stocks instead of looking for the
best investments.

To me AMAT is becoming a very good short candidate. It's up 90% just
this year alone and trading well above its usual range of valuation and
at a significant premium to the group. Prior to this year, it was just
another semi-equip and traded at the same levels as the others. It
suffered just as bad as most of the others in the last downturn and was
equally ostrasized. But at some time since then, which I seem to have
miss, it seems to have been blessed by the gods of "bigness" and
placed in the nifty-fifty club, as if it were now immune to the cycles that
still rule the others in the group.

Seems as if the market loves monopolies or near monopolies (ie. INTC,
MSFT, KO etc.) I guess they think that AMAT is on its way to crushing
the other semi-equips and monopolizing the business.
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