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

To: Sam Citron who wrote (43249)	3/6/2001 6:19:17 PM
From: Cary Salsberg	Read Replies (1) \| Respond to of 70976

Sam, We were in a semi-equip up cycle that started in 1999 and rocketed up in 2000. The stock market tech bubble burst and there is a major inventory and production level adjustment in technology. Semi-equip sales and orders have started to fall and they seem to be validating the price drop. I believe that there are two scenarios, "pay me now or pay me later." The pay me now scenario drops semi equip sales and orders throughout 2001 and into 2002 and I get my prices in 2001. The pay me later scenario allows semi equip sales and orders to rise by Q3 and the up cycle continues through 2002 and into 2003. Semi-equip prices rise to 80-100% of 2000 highs. In mid 2003, I get my prices. I am less confident about getting my prices for ALTR and XLNX, and even less for LLTC and MXIM.

To: Sam Citron who wrote (43249)	3/6/2001 9:13:50 PM
From: Ian@SI	Read Replies (1) \| Respond to of 70976

Ian thinks it is foolish that I would not simply buy AMAT at $50 and hold it until it hits $150. I think he is the optimist. Not quite Sam. You asked for a better alternative to offering almost 2 year's insurance on $12000 for a premium of only $2700. I suggested 2 alternatives. 1. Just buy the shares and sell them once you had a profit which was about 40 times greater than the $2700; something which I think is quite realistic within the life of those contracts. 2. Write much shorter term options more frequently, taking somewhere between 4 and 10 times as much premium during the contract life for the leaps you suggested: More risky, but quite possible. And no, I wouldn't write those contracts today when AMAT is much closer to the top of its recent range than the bottom. Ian.