Matt, no offense, but you are dreaming <g>!
You are in at a good price for the long term, IMO, but I think you'll have several opportunities in the next 6 months to add to your position at even lower prices. Look at AMAT's book value, and look how low tech stocks have traded relative to book in cyclical downturns in the past (not to mention the possibility of a protracted bear market in 1997).
I like AMAT, just not right now. I own some LRCX and wish I didn't, because the business they and AMAT are in face 3-4 difficult sales quarters from all indications of fab pushouts and cancellations. LRCX at least has a book value much closer to its current price, so I'm protecting myself by writing 3-6 month out covered calls. I'd respectfully suggest you consider doing that with your AMAT position too.
I hope by the end of 1997, AMAT and LRCX will be pushing $40, but demand can stay low for longer than you think, and unless estimates continue to be lowered, I doubt AMAT will be exceeding. More likely they will give guidance that current estimates are too rosy.
Just another perspective to balance your over-optimistic one. You could end up being more correct than me, and I hope you are <g>!
Paul |
