Orson, if you still feel nervous about the prospects of AMAT for the next few months then set aside even 10K only (from the proceeds of your AMAT sales) to be used later to buy LEAPs. If AMAT is to experience again the likes of the Bear Market that happened from Summer, 1995 to Summer,1996---then you have some money to take advantage for profit as the stock goes back to the levels of profitability it is experiencing now. Bear in mind that the stock always comes back...
The currency turmoil going on in countries like Indonesia, Malaysia, Thailand and The Philippines is a result of "self-defense" of these countries in their economic competition with the Japanese. As we know, the currencies of these countries are floating---tied to the U.S. Dollar. As the Dollar appreciates against the Yen, so their currencies appreciate against the Yen---as a result, the products they produce for exports become more expensive than those being produced by Japan. So, by inflating their currencies by 20%, they get even with Japan and at the same time attract more foreign companies to come to their shores to provide more jobs for their people. Such is the Magic of Inflation... (As a side note, the Philippines, although so engrossed with Petty Politics that scares foreign companies, stands to gain with the Magic of Inflation: they survive with little help from others---the young, with no jobs available just go to College to have a passport in going abroad to find jobs later, being financed now by their Parents and/or Brothers and Sister who are now working abroad)...
But what is this Inflation to do with us?...Not much really, we export little to them---We stand to gain from imports, from them getting cheaper as their labor forces become cheaper. Furthermore, companies like AMAT who sells to CHIP Makers based on such prosperous countries like Japan, Taiwan, Korea, Countries in Europe and elsewhere that have operations in these countries with currency problems will benefit even more...Of course, companies that export to them will suffer, but not in the Philippines---the Dollars funneled to the Philippines including in Tourism (Homecamings) become more Valuable and Buy More foreign goods!...
As for IBM's Copper business---it's 12 to 18 months to get into full production. as told to us by AMAT's Management. Who knows, something better might crop up later...In the meantime---let's enjoy Aluminum while it Lasts!... |
