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Politics : Formerly About Applied Materials
AMAT 269.55+0.3%Dec 4 3:59 PM EST
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To: derek cao who wrote (21982)7/20/1998 7:36:00 PM
From: Quant  Read Replies (1) of 70976
 
The article you referred to was published last week in a San Francisco Examiner business section. Conclusion: news is old and it's too late to buy when it's bad...(read carefully). The SF conference was used as a forum to lower expectations in the industry so that future results can exceed those expectations.

While the semi industry looks in dire shape, there is reason for encouragement:

1. Inventory imbalances in ICs are rapidly correcting. In fact, there may be shortages in all semi sectors (telecom, network, PC) by 4Q '98. These shortages may be exacerbated by the Asian crisis. Result: potential price increases and margin improvements to bottom line for semi manufacturers.

2. Consolidation. Regardless of whether orders for CAPEX don't improve until mid-late 1999, companies with stature of AMAT will be viewed as using such a period for increasing market share via acquisition.

3. Demand is back-ended for CAPEX into 21st century. Concisely put, future demand is robust despite near-term conditions. The 21st century just isn't that far away.

4. Japan dealing with its problems. All 3 front-runners for prime minister position arguing for aggressive governmental stimulus and banking reform.

5. Technicals: SOX index remains in firm upside trend as does AMAT.(RSI and MACD indicators confirm for both)

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