Semi Equipment-Sell when they're singing in the streets Message Board

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Technology Stocks : Semi Equipment-Sell when they're singing in the streets

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To: Pink Minion who wrote (14)	2/24/2000 9:18:00 AM
From: James Calladine	of 276

SEMI EQUIPMENT STOCK PRICES: Please excuse the simplicity of what I am proposing. It is based on my feeling and observation, not based on specific testing. I believe the market pays attention to many factors, but the "canary in the mine" from my point of view is Book to Bill and backlog information. For the simple reason that sales are the lifeblood of any business. If backlog as an absolute figure is still continuing to go up, analysts are comfortable, PROVIDING margins are constant or improving (for obvious reasons) and costs are still under control. There's business there that in the future should be able to be converted to profits. In parallel, if the book to bill ratio is improving, that provides a good comfort zone, as well, for the reason that the rate at which the backlog is being converted into sales is not worsening, but getting better. But when those items change for the worse, the canary is not singing all the time! The analysts then start looking more intensively at the momentum in the stock. If it is still there, then they stay in place. When the momentum seriously starts to flag, then they start getting out--of course not necessarily all at once, because they may still be a little early. Just my point of view. Of course I very much welcome the different views that the others of you have. Best wishes, Jim

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