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Technology Stocks : Semi Equipment-Sell when they're singing in the streets
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To: Ian@SI who wrote (162)5/30/2000 11:15:00 PM
From: Q.   of 276
 
Having listened to many conference calls in the sector since 1996, a time span that has included a couple of very nasty downturns in the stock prices, I've come to the following two conclusions:

#1
CEO's in this sector truthfully tell you what they know about the outlook for business conditions.

#2
Conclusion # 1 doesn't matter. The CEO's are as surprised as anybody else, when a downturn or upturn happens.

Here's an example:
I've kept careful notes each quarter for Mattson conference calls for a couple of years. Included in my notes are an assessment of how positive or negative a tone the CEO expressed, re. the outlook. Looking back at them, I find that the CEO was:
* ebullient about the outlook just weeks before bookings entered a serious downturn in 1997 ("1998 will be a great year for Mattson Technology," he said)
* his most negative tone was expressed just before an upturn in 1998.

I think conference calls are exceedingly valuable for understanding the business.

But if somebody wants to time the market for this highly cyclical sector, the conference calls are not helpful in the way you would like. Indeed, if they have any utility at all in timing a stock investment, it is as a CONTRARIAN indicator. Even then, they aren't precise.
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