Applied Materials No-Politics Thread (AMAT) Message Board

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

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To: Return to Sender who wrote (17454)	1/25/2006 1:38:54 PM
From: Cary Salsberg	Read Replies (1) of 25522

RE: "...buy and hold stocks in this industry as cheaply as you and others did in 1996 through 1998 (buying then selling in early 2000)." That was my biggest success and I realize that the lion's share of the gain was just luck. The only skill was to recognize excess and that was a no-brainer, yet only partially accomplished. I don't believe we will see a similar scenario. RE: "the yield curve" It is all about inflation and inflation fears. Short rates are up because of fears and long rates are low because of little inflation. If inflation stays low, fears will subside and short rates will fall. If not, long rates will rise. The yield curve has been very close to inverted. If it actually moves to inverted, the small statistical change doesn't really tell us anything about prospects for recession. The housing market will be the key to the near term economy. It is slowing and it has supported about 1/3 of GDP growth. The best scenario is a "soft" landing and 2.5% GDP growth with flat to modestly down real estate prices. My investment strategy is based on my view that we are entering the "golden age" of semiconductor technology. We are in the last 10-15 years of Moore's law doubling and price/capability will make semis pervasive. I don't buy the mature industry argument or the slowing growth argument. A large segment of the semi market has always been commoditized and these products don't grow revenues or produce acceptable profits. I think this is the time to buy and hold the best quality companies. Companies that serve the widest spectrum of customers, directly or indirectly, and which have the best and most sustainable competitive advantages. This is not a popular strategy, now. There are many who look at it with derision. The stocks have been subject to very high volatility, particularly on down days and "disappointment." That is what it means to move against the crowd.

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