I've been reading the comments here and have a few thoughts:
Long-term, stocks like AMAT are excellent values. I bought at 33, 28,
and today I bought more at 23. Will the stock go down to 15? Maybe.
Who knows. It could also pop up to 30 next month. Look, what drives
the price is simply supply and demand, not value. Right now, the
investor pyschology of tech (especially chip) stocks is extremely
negative, which to me means a good buying opportunity. Having said
that, I'm still fully prepared to watch the stock go down further and
feel OK about buying when I did. Short term, I simply don't know what is going to
happen. Long term, I feel fairly confident that the continuing growth
of technology, PCs, and high-end chips will spell good news for leading companies
like AMAT.
As an individual investor, I can wait longer than fund managers can
for good results. The problem with mutual funds today is that they
must push for results every quarter to keep funds flowing in from
people who aggressively shop them. Just on a common sense level,
this would seem to exaggerate short-term weaknesses in stocks which
still have solid long-term fundamentals, such as AMAT,
because the fund managers cannot wait for the turnaround. And
when there is no demand from fund managers for certain stocks during
a short term period, of course their price will reflect that. There just
aren't that many buyers for AMAT right now.
These are just some common sense issues to me - someone tell me
that I'm naive. But I applied them in the same way in buying Intel and
Microsoft during the Internet hype earlier this year, buying
in at the low 50's and 80's respectively. They are now in the low 80's
120's. Again, it seems to me that individual investors who are willing
to wait longer than one quarter for good returns have a advantage to
take advantage of oversold stocks. AMAT seems to me one of those
opportunities.
Ken Sanders |
