Applied Materials No-Politics Thread (AMAT) Message Board

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Technology Stocks : Applied Materials No-Politics Thread (AMAT)

AMAT 226.05

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Nov 14 9:30 AM EST

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To: Sarmad Y. Hermiz who wrote (2044)	8/3/2002 7:50:20 AM
From: robert b furman	Read Replies (1) of 25522

HI Sarmad, I agree about the patience part. I'm a little doubtful about the supposed weakness of this last quarter. I will qualify my next comments by admitting that I'm an optimist,however: 1) My dealerships both just completed the highest volume sales months of the year.Historically July's are not that strong as many people take this month for vacations.0.0% really worked.Grantyed those are powerful incentives. 2)For 2 weeks of July - GM was shut down for a mandatory vacation period.This has been an annual tradition for years.It must impact GDP to shut down the worlds largest manufacturer for 2 of a quarters 13 weeks (15%).In past years I've heard reference made to this weak period.I'm not sure but I suspect Ford and Chrysler do the same thing. 3) Last week when in Wiscinsin Kohler (the areas largest employer was down for a mandatory week of vacation also. Perhaps seasonality workd this out - but I didn't hear any discussion.The news just skipped over the numbers and went straight to double dip recession. Retail clothing was off - heck school by law in Wisconsin doesn't start till after Labor day ( farmers need kids to harvest crops).In Texas,our schools start early and it is still 2 weeks away. From the Retail perspective - we set records and sales look strong.From the inventory side my Livingston store ran out and we had to transfer 24 trucks from cleveland to them.That only gives them a 30 day supply of 2002 models.At our current sales rate my store will be out of product by October - that means I'll have to order vehicles this month. I try to keep inventory around 5 million,In June my inventory peked at 11.3 million as I wanted a big 02 carry over.Most dealers don't get that aggressive and are in a similar low inventory state.These dealers are panicing and ordering big into the fall. My point here is this all appears to add up to strong new orders for the second half combined with a low inventory condition.It should be very strong for auto production. Auto production added 1 - 1 1/2 % of GDP in Q1 per NADA publications. This time a year ago I had a larger inventory as sales were declining,now it's reversed. I don't see a double dip - I see a slow recovery gaining steam.There is entirely too much guessing going on and most of it is on the negative side. JMHO Bob

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