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Politics : Formerly About Applied Materials

AMAT 301.11

+6.9%

Jan 9 9:30 AM EST

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To: Cary Salsberg who wrote (1807)	9/5/1996 8:59:00 PM
From: Don Additon	of 70976

You are exactly right when you say that investor sentiment in the SEM's is NOT extremely negative. July was scary, but wait until earnings are released beginning next month. Year-over-year drops in EPS should lead to some real negative sentiment - shareholders deciding to take a tax loss and get out whatever the price. {Refer to techstocks.com for more in-depth discussion} As AMAT has fallen from near $60 last year to current levels, it has been difficult not to say "AMAT is a bargain at 35, 30, 25 ... based ENTIRELY on last year's high. However, 1995 was an anomoly for the chipmakers and 1996 is an anomoly for the SEMs (due to the cyclical lag). Keep in mind that revenues for AMAT were $639M in 1991 - they should break $4B for fiscal 1996! It will take some time to work this fab frenzy out of the system. If one considers that AMAT could have been bought for under $4 (split-adjusted) in 1991, $15 may look pretty good for a long-term investor. Till then it will will be a long haul - especially if the institutions decide to write this stock off until the next upcycle becomes OBVIOUS to everyone (the usual case)! In closing, we "little people" may move nudge these stocks slightly , but it will be Fidelity et al who will rocket the SEMs up and down! Before buying from the perspective of a (long-term) individual, at least consider what the large (e.g. SHORT-TERM) institutions are thinking. IMHO they will reduce or eliminate losing holdings before the books are closed for 1996 as they do not want to carry losses for all to see (and question)!

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