Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 223.31

-3.2%

3:59 PM EST

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To: mitch-c who wrote (37070)	8/29/2000 11:52:30 PM
From: Sun Tzu	Read Replies (2) of 70976

Thanks for the your post. I agree about buying what you understand and Cary's idea about buying near the bottom of the cycle and selling near the top has been one of my strategies for many years. So we are in agreement on many points. When I was active on The Art of Investing thread, I made a point of making "time horizon" the most important aspect of investing. Cary's advantage over the professional fund managers and traders is that he has picked a time span that is unavailable to them. Thus he can take advantage of this lack of competition. I am not so sure that I agree with your subjective interpretation of risk though. Assessing risk is a very complicated task. I always trust my intuitions when trading, but almost never when assessing risk. It is just too complicated for that approach. BTW, When I asked "Why AMAT", what I was really after was answers along the lines of "AMAT has the technological advantage XYZ over the rest and it is an important one because..." or an answer like "AMAT has a strategic advantage over the rest of industry which justifies X amount of premium" [note, an example of strategic advantage is MSFT due to its monopoly power] or at the very least an answer along the lines of "historical valuations of AMAT relative to the market make it likely that it will have the best returns". Instead, almost everyone who answered, in one way or another said AMAT is a buy because they are the best known name in the semicaps. Personally I think when a company is very well know, enough eye balls watch it to ensure that the stock is never undervalued. Worse, the sheer size and notoriety of the company often leads the fund managers to make it core holding, thereby making the stock rather overvalued (until they all rush to the exit of course). Sun Tzu

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