Semi Equipment Analysis Message Board

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Technology Stocks : Semi Equipment Analysis

SOXX 346.30

-4.1%

Jan 30 4:00 PM EST

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To: Donald Wennerstrom who wrote (673)	6/11/2001 9:04:08 PM
From: Return to Sender	Read Replies (1) of 95823

Don, I believe that tomorrow the group could end the day higher but the short term trend is down. In all honesty despite continued interest rate cuts we have not yet seen any groundbreaking products that will stimulate new growth. I follow the market in its entirety and over the years I have learned a lot from the mistakes I have made. The chip equipment group will be one of the earliest to benefit from the recovery when it comes. We know this from past market cycles. The recovery in stock prices we have seen so far is wonderful but it is based on hopes for a recovery that we all knew was coming. The recovery simply has not happened yet leaving stock prices at risk based on those high PE's and lowered earnings expectations. Looking at those PE's from November 2000 and even the stock prices from early April of this year I can't help but wonder how long the group can hold up if the warnings continue. That being said there is a not so subtle change in market behavior going on for companies that make it clear that they can eventually make profits grow again. Take Anadigics today; The stock was halted on an earnings warning, reopened, sold off and then gained it all back and more on a bad day. Interesting but true: finance.yahoo.com So the story here is simply a battle between what is fair value today and where these stock prices will end up when the economy does improve. It will improve and most likely by the 4th quarter of this year as Microsoft introduces Windows XP and their own game console the Xbox. dailynews.yahoo.com I don't even remember the last Microsoft ad I saw on TV but they will market these products. In the meantime I will trade the range on the stocks in the chip equipment sector or perhaps the broader semiconductor market. There will be plenty of money to be made for both patient investors and short term traders. If we stay in a trading range then I will move in and out of specific issues. If the market breaks down as it may very well do then I will look to add quality names at lower levels like AMAT. RtS

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