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Technology Stocks : Semi Equipment Analysis

SOXX 342.47

+1.6%

Jan 16 4:00 PM EST

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To: orkrious who wrote (2043)	2/20/2002 6:08:27 PM
From: Return to Sender	Read Replies (1) of 95738

Nice bounce off the low end of the range today. I wanted to wait to comment on your post until we could both benefit from hindsight. Here is an out take from one of my posts yesterday that you highlighted: I still think we stay in this trading range And then your response What are you smoking? These stocks deserve a 75% haircut. As Fred Hickey said in today's newsletter, AMAT is currently selling for roughly 10x their quarterly sales run rate. In the 1998 trough, AMAT sold at 2x sales, at the 1996 trough it was 1x sales. I'm happy with my rather large short position. ork Except for the question of what I have been smoking.<ggg> I don't smoke anything! Not even salmon<gg> I would largely agree with your opinion that these stocks are selling at lofty valuations. Unfortunately as today's bounce should prove they do not go down easy. I actually shorted AMAT earlier today and sold in time to pocket a nice gain. Unlike you I personally am not ready to commit long term funds to an AMAT short position. Large long term short position in AMAT? Is what you are doing? Most of the stocks in the semiconductor industry have previously been very profitable companies. True... many remain well above traditional trough valuations but I wonder how many of them will end up filing for bankruptcy like so many companies from other sectors have done? The reason these stocks refuse to die is investor optimism about an impending recovery. It may be weak, it may double dip but we will get a recovery and then the question will be how long and how strong. And that is why these stock continue to show leadership anytime technology stocks take center stage in any rally. These days it is probably a mistake to remain in any position long or short too long but ultimately I have great confidence in the semiconductor industry. Far more than any other single industry affiliated with technology. Short term I will continue to attempt to trade the range. Some days will be good like today. Some will be bad. When that happens well... Maybe I should be smoking something! RtS

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