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Politics : Formerly About Applied Materials

AMAT 242.41

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Nov 25 3:59 PM EST

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To: Steve Robinett who wrote (13723)	12/21/1997 5:14:00 PM
From: davesd	Read Replies (1) of 70976

Steve, It's interesting that you use the farmer example. My dad's a farmer and he survived the late 80's when farm aid concerts were being hosted by Wille Nelson. In the mid 80's a couple of the neighbouring farms spent alot of money on new John Deere tractors, new spray rigs and drip irrigation. They sure cut the cost of production. Their cost of production was lower than my dad's and others in the area....but they took on alot of debt to get there...unfortunately, for them the farming recession hit and the price of produce fell and the price of land followed. It wasn't long before the banks were knocking on their door. Since the equity in the farms was apporaching zero, they could not get anyone to loan them money to continue farming. During this time, some farmers like my dad cut spending and made due with what they had to conserve the cash on hand waiting for the the maket to turn. Over the last few years the market has turned for the better, those guys who put in the fancy stuff are long gone and my dad and others now owns their land. Many big name farmers disappeared in the late 80's cause they over expended themselves. Unfortunately, how were they to know that the downturn in farming was going to last for over 5 years. I think the same can apply to chip making....look at MU for example...as the market turned down...MU put the brakes on spending...they still have cash in the bank to survive the downturn.And buy the latest new tools when the upturn starts. Those who are still investing on tool in a downturn may over extend themselves and not make it to the next upturn or have cash to buy the latest tools at the start of the upturn. dave

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