Roly,
As a long time/term investor in AMAT myself, I think you are buying
one of the finest investments capable of assured compound returns
on the market. It is the "gorilla" of its industry, no doubt.
My concern/issue is this. Earlier this year before the huge summer
run up (caused by the funds buying and raising prices) AMAT was in
the same position that it is in right now, all that has changed is
more time has gone by and there are 2x the amount of stock available
now as then. In May/June the stock price was fluctuating between
about $55 and $70 (and this in only 2 months from $45 average).
Once the funds and large investors take profits for the year or for
tax purposes what happens if the stock value is perceived to be
the same as last June?? A scary thought, yes? That could mean the
actual stock value might be perceived as worth $22 to $35 in a
high growth potential market. I guess I am questioning the growth
prospects next year in light of all the "observations/conjectures"
that both Dave and I have stated based on our "perception" of the
market fundamentals.
If Dave and I agree, it doesn't mean that we are necessarily correct,
but at some point the funds and others may come to the same conclusion
on any other "bad" or enlightening news that comes forth.
I am sort of in the same situation as you, I bought some stock at
higher prices but I kept a very sizable amount of cash available to
buy as close to the low as I can, which historically is in the mid
1st quarter of Amat's fiscal year, starting in Nov.
Hang on for the ride, but at what point do you sell and wait for
the bargain prices, and will you have the money when the price is
close to its'lows? It is possible that $31 1/4 was the low, but the
Nasdaq has gone from about 750 to over 1700 this year, a bit pricey
I think, in such a short time. At some point there will be a
correction to reasonable levels based on valuation. My feeling is
that AMAT will follow the market short term, and go down as the funds take profits to show their gains for the fundholders. There will be
lots of money wanting to buy low priced stocks next year, Amat is
sure to be on the list.
Good investing,
BB |
