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Politics : Formerly About Applied Materials
AMAT 322.51+6.1%Feb 6 9:30 AM EST
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To: Ian@SI who wrote (46760)5/15/2001 4:43:37 PM
From: Jacob Snyder  Read Replies (1) of 70976
 
re: "inflation is expected to remain contained", and "underlying rate of increase (in productivity) appears to be largely intact"

Anyone long capital equipment companies (semi or otherwise) today, better hope and pray the Fed is right. Recent data on the above two statements is not encouraging. If the Fed is wrong, and the last productivity numbers (negative) are the start of a trend, then the Fed will be raising interest rates by year-end (as inflation goes on the wrong side of 4%), and the bottom in semi-equip bookings won't happen till mid-2002.

But, for the moment, I think the Fed has put a floor under stock prices. I sold most of my puts earlier this month, and I will probably sell the remaining ones (in JNPR and TXN) soon. I'll take small losses.

For the remainder of this year, I will probably just play short-term long trades. Valuations and the threat of inflation and/or recession scare me away from any new long-term buys. The Fed scares me out of short positions. That doesn't leave much except cash and short-term games, for me at the moment. I have a lot of cap gains that will become longterm in the June to August 2001 time-frame, and I'll be selling them into continued strength. I could end 2001 exactly as I began 2000 (70% cash).
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