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Politics : Formerly About Applied Materials
AMAT 327.01+2.5%Jan 16 9:30 AM EST
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To: Narotham Reddy who wrote (10653)11/10/1997 1:29:00 PM
From: akidron  Read Replies (2) of 70976
 
actually on the beauty pagent level it makes sense... these analysts straddle a fine line, on the one hand they owe their living to the company's the follow, in that if they are too agressively negative, the flow of information stops. on the other hand they have occasionally got to protect the investors represented by the institutions they serve. so unless the company is really headed to the crapper they deal in degrees of buy and hold... its very inofensive, yet everybody knows what they really mean. Hold = sell, long term hold = short the stock and buy back later, buy = hold, and strong buy = accumulate, and focus one or priority list or any other such extreme catogary means sh*t we missed that one on the way up but we're here now.

This particular downgrade is actually reasonably disturbing because the stock has already corrected a great deal and Cowen are not idiots like Prudentail or Bear Stearns, however it would be a mistake to read a great deal into it now as it is more likely a move caused by a disire to hedge given the macro outlook than a response to real news.

One thing I would say is, that while it is important to know what conventional wisdom says, it is a mistake to roll with it, because real money is never made that way. real money is made when you are on the side of the unexpected.

AMAT is the perfect example of this truism. If you bought when the stock was at the peak of the downgrade cycle and sold at the top of the upgrade cycle you would have maximised your profits and now be in cash ready to do the whole dance again.

I know this sounds a little cynical... but it works..
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