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JACOB SYNDER, i agree nobody remembers in 1996 when amat was 15 dollers per share adjusted for the split in the simple facts imo this downcycle is more dangerous than before because of the depression in asia-regarding the stock markets in japan going from whatever to whatever 30,000 to 15,000-well the market in japan today is finally getting to the point where it really affecting the economy-thats why it is different-if the u.s market dropped 20% it would have a small percentage in gnp drop but what is happening in japan is pretty close to a depression in the economy which was not the case two or three or four years ago or all the business and the banks failing which was not happening two years ago and other asian countries were in great shape one to four years ago. regarding amat-the company eps are decreasing 28% sequentially right now from first to second quarter and again in my IMO 10-20 % FROM second to third. also revenues will be down sequentially and the book to bill will be around .80 which is awful . also, ill say it again amat does 58% of their business in asia and 1 year ago most of asia markets-outside japan were in good shape, business was strong -where today economically japan is being compared to our depression in 1929 -banks and companies are out of business-other asia markets have been desroyed from two year ago. i don;t remember the imf coming in helping asia in 1996 . amat has recieved a lot of their growth because of asia -58% of their business and now that busines is in trouble. this is not 1996 where you had a supply demand equation with semiconductor. this is a serious fundamental problem with the economy of a climate that unfortunately makes up over 50% of their business. well, maybe the u.s and europe will make it up but amat does more business in asia than both those continents combined. one bullish note is this market is overvalued and could continue to go higher and eps does not matter -that is happening and could continue. i agree with you on that. my personal feeling is china will be forced to devalue their currency and then we are in trouble, also, maybe the past doesn't matter , but the simply truth and its been proven that semiconductor stocks usually bottom out somewhere around 1xsales during . thats the fact ---amat at 3x sales . good luck i.m short amat with an average cost today around 36.375. fortunately we are in a bull market and most semi's have been hit hard-klic,klac.ipec, lscc, ect-so at best i see amat trading between 30-38 in that range . but if any outside forces change ,interst rates, asia-china, market correction it will get hit hard-and i know money managers well these guys are not patience -look at the turnover of mutual funds -they will dump it the moment their is a problem-ala 1996 -if you bought when the money managers panicked in the summer you did very well. regarding amat being the strongest in their business-well orcl is the strongest in their business -so is intc, and they both got smoked because of eps were not great but they will show bette numbers than what amat will do so amat can't go down because its the biggest is bs. |
