Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 235.13

+2.2%

3:59 PM EST

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To: Jacob Snyder who wrote (27531)	1/5/1999 1:41:00 PM
From: Q.	Read Replies (1) of 70976

Jacob, by shifting from semi equips to oil service, you've made the same sector rotation as me, and for the same reason: value. The similarity of these sectors is considerable. Oil services are highly cyclical in the same way as semi equips, as both of them rely on capital investment by their cyclical customers. These customers sell commodities (oil and drams). Both of these commodities are selling at low prices now, due in part to overcapacity. The difference is that semi equips have bounced up to early 1997 levels without a commensurate improvement in sales or orders, or in overcapacity, whereas oil services are languishing ever lower, having now dropped to the levels of 3 years ago. Semi equips seem to vary from highly undervalued to highly overvalued, and they now look more like the latter than the former.

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