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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (35269)	5/18/2000 11:17:00 PM
From: Lone Star	Read Replies (1) \| Respond to of 70976

Am I mistaken,or is AMAT's forward P/E on latest concensus forecasts about 26 or so? Hardly overpriced with current capacity/demand outlook, on-going buys also for new materials, and 300mm wave beginning. Now Cisco and other gorillas are still whacked out with forward P/E's at 60-100. I haven't relooked at these numbers in a while so i may be off a bit.

To: Cary Salsberg who wrote (35269)	5/19/2000 4:44:00 PM
From: Sam Citron	Respond to of 70976

<OT>Cary, I'm seeing lots of pain but little blood at the moment. Over the past couple of months I have been accumulating PG, ABT and JNJ on weakness. These defensive stocks are now the bulk of my account, along with DPH and COMS. I am almost 70% in cash at the moment. With the Fed tightening, the techs in summer doldrum mode, and the prospect of excruciating tax-loss selling ahead, there is nothing motivating a more aggressive posture until the usual October sale, unless we see a substantial increase in pessimism. The tech sector in general still appears overextended to me so I am inclined to wait for it to overcorrect to the down side before attempting to pick up the occasional babies that are strewn in with the bathwater. I look mainly for technical indicators to alert me to these inflection points in market sentiment. Although few industries can match the superior cyclical growth characteristics of the semiconductor equipment industry, I believe that the blood in the streets approach is generally applicable to all industries. It is really just an issue of valuation and the patience and discipline to buy steadily and persistently when bargains appear and to sell when better opportunities present themselves. I also find that the simple principles of supply and demand that were indelibly etched upon my brain in undergraduate economics classes have great applicability in determining equilibrium prices of shares when lock-up expirations take place with significant and predictible supply consequences. I would also mention that I continue to see benefit in selling naked puts, especially LEAPs, as an alternative or supplement to simple scale down buying of stocks that are perceived to be bargains. The Black-Scholes formula consistently misprices such LEAPs by ignoring their growth component. Sam