Hi Everybody Who Cares,
Dave's Concern about the worsening condition in the DRAM industry in which AMAT is in business---is a legitimate one. Although AMAT, being a flexible company that easily adapt to changes, is very successful in getting money from other businesses to take care of dwindling money from the DRAM business---we should be prepared for something worse that could happen. How can we Profit from this CHANGE?---that's the primary concern for us...
What if history is going to repeat itself like what happened in summer, 1995---when, despite AMAT posting More-Than-Double Earnings report, we saw AMAT's price Yoyoed downwards from the previous All-Time high of almost 60!---because there was an Over-capacity in the DRAM industry...How can we determine if AMAT is at the start of a Bear market?...If you are following my Posts, from time to time, I describe something about an AMAT Playfield measuring from the All-Time High to a 20% Dip or Correction. As long as AMAT stays inside this Playfield, we are in a Bull market. If the stock Dips to 25% and do not snap back inside the Playfield---that's the time we have to really be concerned: a 25% Dip could deteriorate to 50% and worse...
What if we are now in a Bear market because of the DRAM problem, like what began in summer, 1995...How can we take advantage of the CHANGE?...This time is when the AMAT LEAPs enter the picture. You already know about how I managed to exchange my AMAT shares into AMAT LEAPs (when the stock was near the bottom at 23). Anybody who bought 100 Calls at that time with an investment of 40K could have seen his money increased to 800K in just one year!...So, we must put aside even 10K only---who knows, it could become 200K later!...
In other words---let's be prepared for CHANGE. By the way, Life is Change itself. If our planet is a Big Wafer, unmoving, in which one side always faces the Sun---all life on the side facing the sun will be Extinguished and all life on the other side will be Frozen to death. Are we glad that there is constant CHANGE as the earth rotates and orbits the sun?...So CHANGE is welcome---if bad, we can can do something to lessen the impact and come out ahead in the long run... |
