Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 155.15

+2.1%

Nov 26 3:59 PM EST

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To: Ian@SI who wrote (2989)	10/23/1997 3:17:00 PM
From: John Cuthbertson	Read Replies (1) of 10921

>I believe that the market has already priced in a lot of bad news based upon [unfounded] fear. And now they're compounding that oversold condition....This week and next will likely be the time to "buy low". Ian, Your proposition is that this selloff has been overdone. Probably right, but I think that it has been in part just a correction of a run-up in the sector that reached irrational levels. Take AMAT for an example: it's now down 30% from its high, but the increase in its price from the low in July '96 to the August high was almost exactly a factor of five, with the trailing P/E climbing above 50; and as John G. told us, the PSR also reached historically high levels. This amazing run-up was itself in turn starting from the irrationally low, blood-running-in-the-streets levels reached in the selloff in 1996. So...I agree with you that this correction has probably been overdone, but based on the history of this sector I fear that the market may easily yet overdo it a lot more in the near future! ==John

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