Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 236.04

+2.6%

9:46 AM EST

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To: Gottfried who wrote (37399)	9/22/2000 5:42:03 PM
From: Cary Salsberg	Read Replies (2) of 70976

I am long and rooting for this sector, but the 3 month trend of bookings and billings, while positive and rising, is also flattening. If you believe in cycles and that a period of flattening will be followed by decreases, the multiple you are willing to pay contracts. On the other hand, if you believe that the flattening is due to capacity constraints on the part of the semi equip makers, you can buy bargains and expect a longer up cycle with gradual improvements in bookings and billing as capacity becomes less constrained. The front end is constrained by lithography, and the back end is constrained by the front end. A note to Brian K. - I am glad that you are limiting margin. There is more risk right now from economic and market factors than from semi-equip cycle factors, but it is generally prudent to cut capital equipment stock allocation in the face of economic slowdown and most investors don't follow the semi-equips as closely as you do.

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