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To: Wally Mastroly who wrote (4857)	4/29/1999 4:56:00 PM
From: Justa Werkenstiff	Read Replies (2) of 15132

AMAT Wally: I wrote earlier this year that AMAT was overvalued when it was trading in the low 50s and I sold out and proceeded to trade it short and long when it was at its heights. The fundamentals did not support the price in my view. It has essentially been dead money but for trading since January when big mo came in strong. Big mo left in some measure in early March. While concern about DRAM prices is understandable, a few month trend does not a market make. The DRAM market is self adjusting. And if history is any guide, there is no relationship between DRAM pricing alone and capital spending. Why? Because DRAM prices are supposed to fall. That is the name of the game. Samsung's plan is to drive its 64 meg price below $2.50 this year. When the Brooks honcho met with the Samsung honcho for dinner recently, he asked him what was his big goal. Answer: to drive the DRAM cost of production down. These guys don't look at short term trends of DRAM pricing and then change directions on the run. They look at the entire picture. As I have posted before, there are two other legs to this three legged stool and they are far more important in my view. They are Asian stabilization and unit computer sales. We have not only stabilized in Asia things have improved. Unit sales of computers are ahead of plan. TI is increasing cap ex this year 30% over budget and ASYT took some of that money today. And other chips are doing fine in my view. BUT the concern re DRAM is now fully discounted in the price of AMAT IMO. Some analysts cited it today in downgrading TER. Now it is the street buzz if it was not before. AMAT will fall more only if the concern about DRAM pricing means anything. I don't think so unless DRAMs get real low below ($7.50) for an extended period. DRAM pricing is anyone's guess and changes quickly in either direction. So I doubled up my AMAT position today. I think the price, although expensive, is supported by the fundamentals in this environment. There were 24m shares traded. That is a big time melt. Stock did not close at the lows which is good. When the NASDAQ was at its lows, AMAT was bumping up in the low 50s off its low. NVLS and KLAC did not test their recent intraday lows today. That is good. The small cap semi equips held firm and even UTEK blipped up on a nice order announcement. SFAM would not budge. CYMI was strong. SVGI would not give an inch. BRKS bumped nicely up. ASYT is poised for a run. Did ETEC or PRIA test their lows?? Nope. Does not look like the end of this cycle to me. The whole sector has had a huge correction over the past few months. I think it is quite telling that TER and AMAT did the worst today. The big capped big boys always cave at the end of a correction. I think we are near the end for this sector provided we do not have an overall market correction here. Same goes for TER. I would bet that you have a better chance of getting AMAT tomorrow than TER at a reasonable price. The big boys can move TER very quickly because they own most of the shares.

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