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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (8694)	9/21/1999 8:55:00 PM
From: Justa Werkenstiff	Read Replies (3) \| Respond to of 15132

Ian: Re: "Shorting the equipment sector just prior to earnings season during the strongest upturn we've seen this decade sounds somewhat suicidal to me." When trading, one must assess the extent to which all the good news is priced into a stock. Last week, the analysts were pricing these stocks to perfection with upgrade after upgrade and subsequent to the big boys loading up on AMAT and SOX calls. Morgan was praising the industry day after day with his stump speech last week. AMAT's new high was unconvincing to me. The volume was not indicative of a sustained move up short term. I noted that the semi equipment sox component was performing quite well while those outside of the sox were underperforming. The small caps in the sector were directionless. It was a very narrow sector rally in a very narrow market. So when I got word of the Taiwan quake, there was a piece of uncertainty that had yet to be discounted. I don't care about the reality of the situation when trading. I know the recovery will proceed. All I care about is the reaction of the crowd in relationship to the price of the stock. Right now in this market the crowd is looking for a reason to sell. Gee, did you notice that good economic news is met with selling in this market? And Mr. Market gave the crowd a reason to sell today in this sector and sell they did. Did you notice Markie of ML today? He was not exactly supportive of the sector. But Markie liked the sector last week. And so I also knew that the bookings report would also be flat at best. The report tonight shows a sequential trend down yet again for the third month in a row -- 3% month over month in August from July. And AMAT says bookings will continue flat for a couple of quarters. Now you and I know this is not a big deal longer term, but I don't care about reality. Reality to the crowd is meaningless. Let's see ... a declining market back-drop with an earthquake in the heart of chip land (hmmmm... reduced sales means reduced revenue means reduced cap ex in the mind of the crowd...push outs maybe?) all with a sequential decline in bookings (hey, did AMAT say flat?) with the prices of these stocks at or near an all time high. Not exactly the kind of environment that would support even higher prices for this sector short term.