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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 160.52-4.9%Dec 12 9:30 AM EST
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To: scott_jiminez who wrote (9343)1/22/2001 11:29:12 PM
From: EACarl   of 10921
 
Scott re "the equipment stocks were down 60-80%. This is as severe a decline that would have occurred if the evidence from the BtB/bookings indicated a severe contraction."

That statement is true, BUT, there is more to it than that.
Since the late 1998 to early 2000 rally was the fastest and strongest ever, and got this sector
to higher valuations than they had ever seen before, even after the decline you mention, most stocks
are still 100% to 200% above what would be "normal" for a down cycle.

It wasn't long ago that the consensus was a quality semi-equip got about a 4X P/S ratio for a cycle
peak. Look at AMAT now. It is NOW at 4X sales or more, but because it has dropped a large %
it appears that it has fallen fo a cycle low. It all depends on what perspective you choose to view.
Just food for thought..........

Regards, Eric.
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