re: would you lighten up on amat or any of the semi's to add to cisco here?
Using pre-1995 valuation ranges, I can't justify buying any of them, at current prices. Which is why my grip on all of them is deliberately weak; I'm willing to sell anything I hold, when it has run up.
The main valuation yardstick I'm using currently, is the 9/01 lows. IMO, those levels set a floor for quality stocks (but not for companies who continue to warn, like EMC, or companies that look likely to come out of this downturn weaker than they went in, like LU and JNPR).
AMAT is a double off its 9/01 lows (26 to 52), while CSCO is "only" up 50% (11.04 to 16.65). So, yes, I'd move money from AMAT to CSCO. In increments.
You've got to pick and choose among the semis, depending on your guess about the future strength of the particular market they sell into, and your guess of how much of that is in the stock. Currently I have limit buy orders for ALTR, beginning at 21, and every 1 point on down.
Began selling AMAT at 50, will sell more on every 5-point further rise in the stock price, be out completely if/when 65 happens. If AMAT hits 65 this year, it'll be at a double-digit P/S (using the trailing 12-month sales number likely by mid-2002), and that is clearly Bubble Territory, for the semi-equips.
For now, I'll buy CSCO at 14-17 (already done), and lighten up (sell about 1/3-1/2 my total position), in the 20-22 area. |
