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Politics : Formerly About Applied Materials

AMAT 217.05

-1.5%

10:21 AM EST

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To: Gottfried who wrote (19217)	5/8/1998 11:39:00 PM
From: akidron	Read Replies (2) of 70976

GM I'll address this to u because you're so fair-minded but its to everybody... In the spring of 1997... when everything looked tickety-boo for our fave rave... Amat announced a $500 million expansion of its production facilities, and hired a bunch of people to man and woman them... Kumer "the prophet" Nathen and other spoke glowingly about all the vacancies and the shiny new cars in the AMAT lot... and we all made out like bandits... especially those of us that bought in at 12 or 13 in '95... But the stock and the co. got ahead of itself... they (Morgan and his cronies) made a mistake... dram wasn't fixed and demand was driven not by the digital revolution but good old fashioned pork - the subsidy of fundamentally unsound fabs... when demand started to crumble the-god-bless-capitalism-we-love-you-pure purists came out with the wonderful idea to feed the various SEA cans-of-worms with IMF, World Bank $$$ and our precious savings.... BAD IDEA... Now we have a situation where AMAT has invested $100s of millions of $$$b in plant it does not need and people it is trying to lay off... and it is going to get worse before it gets better, because the biggest, and the unbailable outest of the worms is Japan, and its going to break... maybe not this week, but very soon... U may say "but that's in the price"... but remember revenues in the second half of this year are likely to be at the level they were in '95 and the 1st half of '99 might well be worse... Of course if your view is very long term the odd ten points or so really doesn't mean much, but if like me you buy cheap and sell expensive... this is not an entry point... 28's better... Finally if the semi's are so cheap why are the strong not buying the niche producers they need to strengthen their offerings at these discount prices ---- the reason of course is that they think there'll be bigger discounts down the road.....

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