Gottfried,
Thanks for the info. I wonder if the price bottom you calculated was based on technical analysis, fundamental, or a combination of the two.
In my previous posts I alluded to the inefficiency that can occur at times in the pricing of stocks by the market. Part of this I think is due to investors being impatient and not wanting to wait for good earnings. Part is also due to momentum players, overall fear/greed, and analysts moving the stock with their often ill-timed upgrades and downgrades. I think AMAT is a stock which is heavily influenced by these factors. I think this explains a good part of why the market priced AMAT at the low of about 13 or so in 1998, before the almost tenfold increase that occurred. In the case of AMAT, I think the future is rock solid, unless management drops the ball. So, I view any big downturns with a lot of suspicion. I can't help but wonder if the past is about to repeat itself all over again. I don't mean a tenfold increase, but maybe just rising to a new high within two years. In general I wonder if AMAT is going to be a strong buy anytime it is down over 50% from the high over the next 5 years or so. That certainly was true over the past 13 years. One needs to remember that near the bottom the news on AMAT will tend to be the most negative, which will make it perhaps hardest to buy at that point. I think it was back in the fall of 1997 when the semiconductor analyst Tom Kurlak was hammering INTC with his downgrades and continuous negative analysis. It seemed like the world was ending for INTC, and not just cyclical factors, there was also the argument that the company had missed the boat by sticking with PC chips. The stock then quadrupled within about 2.5 years. Having lived through such times (and foolishly having sold my INTC then), I have a tendency now to "buy low, sell high", when it comes to these many of these very volatile tech stocks. Of course buy and hold is a good plan too, but the more volatility there is the more argument there is for straying from the buy and hold philosophy.
John |
