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Politics : Formerly About Applied Materials

AMAT 252.25

+0.9%

Nov 28 9:30 AM EST

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To: Margarita who wrote (8678)	10/16/1997 5:34:00 PM
From: Tito L. Nisperos Jr.	of 70976

Hi Margarita, Lester and All, Almost everybody loves Sales. Before shopping, they wait for 20 to 50% discounts, Clearance and Fire sales; Mother's day sale. I used to feel sorry for companies that hold Liquidation and Going Out of Business sales; not anymore since I found out that the same companies "rise up" the following year to hold another liquidation sales... Shoppers troop to shopping malls in droves whenever vendors cut prices. Vendors lower their prices but in the process sell more and thus maintain their profitability... They create new markets. Take for instance, the under $500 computers, destined to sell like Hot Cakes this Christmas---using CYRX and AMD Chips. Now, households can have multiple Computers like they have multiple TVs and Video Recorders... With their stocks valued higher this year, people feel they are richer and in the mood to Buy. if we have a Good Christmas in Hi-Tech sales this year, then Hi-Tech companies will be busy again next year to manufacture their wares... Is the $500 computer going to impact tihe fortunes of DELL and CPQ? Not really; it is a New Market---for those who otherwise can not afford the over $1000 computers with INTC Chip Inside... We already know that the more Chips are manufactured and used---the better for AMAT. It doesn't matter who wins in this price reduction or competition in Sales going on; after all AMAT's business is to supply the weapons or equipments to both the Winners and the Losers... Could you imagine INTC not ordering Equipments just because its profitability is getting reduced due to Price-Cutting?---thus letting its competitors catch-up?... Today is a 20% Discount Sale Day for AMAT...

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