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Politics : Formerly About Applied Materials
AMAT 262.42+0.6%3:11 PM EST
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To: Cary Salsberg who wrote (48179)6/19/2001 1:55:50 PM
From: Kirk ©  Read Replies (1) of 70976
 
I don't agree that a rise in B2B as you postulated would need to be bearish.

Remember, at the top, orders AND shipments were still growing but the ratio was declining.. Thus the B2B peaked and started to decline. That was the beginning of the end and the hot money started to leave the stocks while we say with our thumbs in our butts and said they were clueless (for the most part..)

Now, we look in a mirror. The RATE OF CHANGE in order growth (a negative number) is slowing as the orders are still low but the cancellations are slowing or ending. I think this flat period is when a company can manage to be profitable as they know what to expect. Any surprises are usually new orders, not cancellations at this part of the cycle. Yes shipments are also declining but the ratio is getting into a region that the companies can manage their expenses to be profitable... Even at current levels, they are STILL much larger than at the top a few cycles back. Just look at Gorfried's charts. They were VERY profitable back then at the peak so they just need to adjust headcount and other expenses to become profitable again... Now any upticks are profitable again. I suppose there could still be order slowdowns but the CEOs all seem to agree the orders are flat now.

Perhaps the computer brought us to the bottom in B2B much sooner due to positive feedback? Of course, that assumes that B2B is not worse than last month...

Again, I think the key to watch is rate of change in order growth...
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