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Politics : Formerly About Applied Materials
AMAT 301.11+6.9%Jan 9 9:30 AM EST
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To: Joseph Beltran who wrote (48154)6/19/2001 11:17:10 AM
From: KMcKlendin  Read Replies (2) of 70976
 
During my years of lurking I have noted a consistent phenomenon: people agree with bullish comments and respond with thinly veiled anger to bearish analyses. The stocks that are highly valued with respect to fundamentals (JDSU, CSCO, ARBA at the market peak) manifest this phenomenon to a greater degree. The psychology behind this behavior is obvious. Recent market action should drive home the point that an intelligent bearish argument is a precious asset to us all. I doubt that anyone here can talk down a stock as heavily traded as AMAT.

An important question is: when do I buy? I believe it would be a mistake to sell AMAT, given the long term prospects and the assumption that a significant part of the downturn is behind us. Buying now is a conservative strategy producing lower long term returns; waiting and attempting to buy lower risks missing a major portion of the rebound. Past experience teaches that AMAT will move significantly off the bottom before any solid evidence of recovery is available. A good strategy might be to establish 25% of a position now, then average down twice with the remaining 25% and 50%.

I would be interested to hear other people's buy strategies.

--Keith
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