Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 223.95

+1.7%

Nov 21 9:30 AM EST

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To: Gottfried who wrote (25326)	10/15/1998 9:47:00 PM
From: Justa Werkenstiff	Read Replies (3) of 70976

G: ": Call me a party pooper, but I did not like the Market's exuberance after the announcement. Next year's earnings picture still looks down." I said two days ago on this thread that there would be a rally in the market before the end of the month that would keep these stocks from revisiting their lows. This was the rally. Sure, we could have backing and filling but say goodbye to the lows for this cycle IMO. Sure, earnings estimates have to come down for 1999. This is a given. But the Fed. is on the side of the investor. The Fed. is on the side of the provider of liquidity. The Fed. is long the market and it never, ever pays to bet against the Fed. The Fed. came out today and absolutely took the shorts to the cleaners. And Greenspan had every intention of taking them to the cleaners to send a clear message whether anyone wants to hear it or not. If one does not want to hear the message, then go ahead and bet against Greenspan and pay the price. What all the bears fail to consider in talking about the market's earnings for 1999 is the multiple expansion that will be accorded to a low inflation, slow growing economy. That is what is happening now. What is inflation? How about 1%. And soon the market will bootstrap this effect by discounting earnings expansion in the second half of 1999. This is how the market works. It is a discounter of bad and good news. The bad news is in the market. Don't believe me? Look at how the market reacted to Ralph Acampora's downgrade last Thursday. The Dow and S & P closed up. Same thing with Abbey Cohen's downward revisions. Nothing happened. The impeachment vote did nada. Government shut down? Who cared? Nobody did. Sure we will have some nasty surprises and mini corrections, but the Fed wants everyone here to provide liquidity on the long side and if you do a good job in equity selection, you will be rewarded. AMAT in the lows 20s was a gift for the taking.

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