ST trading:
I'm undecided what to do, short-term. On the one hand, AMAT at 40 would be a 50% rally off the bottom, and expected strong resistance. A place to sell, and wait for the next dip. On the other hand, I think there is a good chance that the late-September panic selling caused prices we won't see again, so I should be holding onto everything I bought then. My cost basis on AMAT is under 30, and I'm beginning to doubt I can improve on that. With recent selling, I now am completely off margin, and have a bit of cash, so I could buy the next dip, even if I don't sell any more now. Since I'm so uncertain, I think I'll just cancel my sell orders, and "await developments".
IMO, the reason valuations are staying so high, is that:
1. the suddenness of the falloff in demand, has caused most tech companies to be seriously oversized, a problem that will be corrected by next year (by downsizing and inventory writeoffs, if nothing else)
2. everyone is expecting a strong 2H02 recovery. The buy-the-dippers are coming out of the woodwork. |
