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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 150.32+5.4%Nov 24 3:59 PM EST
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To: Ian@SI who wrote (3028)10/25/1997 2:38:00 AM
From: Cary Salsberg  Read Replies (4) of 10921
 
Ian,

RE: "...how probable is it that the prices for EGLS, LRCX, SVGI or AMAT will be seen before / after the AMAT call?"

AMAT went from 59+ to 22+ to 108+ (pre-split) while its bookings went from 1.3B to .6B to 1.2B. This is tremendous price sensitivity to orders! Orders depend on the customers and they don't coordinate to provide a smooth, increasing order series. Prices have the potential to go anywhere.

I think it is more likely that the prices will be reached before the CC than after. There is tremendous downward momentum so a further 10-30% fall before the CC is probably 50%. I believe that AMAT will support its fellow semi-equips and give positive guidance for 98. I think the probability of positive guidance is 65%, so a fall to my prices and possibly significantly below has a probability of 35%.

I am positive about the CC because I believe there has been skepticism about the recovery from the very beginning but AMAT's predictions and the group's meeting/beating them have outweighed the doubters. Since the August CC, there has been no guidance and the reasons for concern have lingered and have been exacerbated (DRAM lower, techs missed EPS, SE Asian markets REACT to currency problems). I believe that semi-equip sales will continue to climb the "wall of worry", that AMAT's CC will be positive (65%), and that prices will stabilize and start rising again slowly and gradually.

I still want to wait because the 35% scenario could get very ugly.

Cary

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