Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 256.41

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Dec 19 9:30 AM EST

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To: Jacob Snyder who wrote (59228)	1/23/2002 2:53:10 PM
From: Cary Salsberg	Read Replies (1) of 70976

Re: "Is this a permanent change, or just a temporary effect of the sudden supply/demand imbalance that happened when business spending fell off a cliff?" Business spending did NOT "fall off a cliff!" In most cases, business spending returned to pre-bubble levels. For some industries and companies, this lower level of spending was made worse by huge inventories developed for bubble level spending. Companies like LLTC, 37% after tax return on sales, did not need to compete on price even with much lower sales levels. I suspect that companies that compete on price now will continue to compete on price unless another bubble comes to bail them out. Strong franchises only allow a company to survive in competition with other strong franchises.

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