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

To: Rick Storm who wrote (43396)	3/9/2001 1:53:17 PM
From: Jacob Snyder	Respond to of 70976

Yes, I will buy in increments. And, after I have started buying, I may sell my highest-cost lot on rallies, and try to pick up more when the bottoms are re-tested. I will begin buying, probably LEAPs, at 35, and buy in increments on down. That's the highest price I'm willing to pay for a longtime position. If we bounce there, forming a double bottom with last year's low, then I may buy more. 40 does seem to be strong support, I could not argue with initiating there. For now, I'm betting that support fails. But I could easily be wrong. If we go several more months, and 40 continues to hold, and inventories at semis start to clear out, and (especially) if semi-equip bookings go flat or up, then I may reconsider buying at 40. Of course, by then, the stock may be at 60. No, AMAT is not the INTC of semi-equip. AMAT is in a much better position than INTC. AMAT has a franchise, doesn't have to compete on price (except during downturns, when no one is buying anyway), and has steadily increasing market share. INTC is facing commoditization of its core business, CPUs for PCs. Notice how margins plunged in their last report. This trend will continue. Intel is trying very hard to diversify, to become a chip conglomerate, with their fingers in lots of different markets. They don't "own" any of those markets, the way they used to "own" the CPU market. The ground is shifting under their feet, and it isn't certain they will find new firm ground to stand on. I was long INTC from 6/98 to 1/00. I will not be buying them back, no matter how low they go. On every downturn, investors say, "AMAT can't go any lower, because it is such a good company". Wrong. Doubleplusmegawrong. When the sector is out of favor, AMAT goes down, and keeps on going down, irrespective of valuation levels, until the news starts getting better. A stock price of 35 corresponds to a P/S ratio of 3.5. In 1998, they bottomed at a P/S of 2.2. In 1996, at 0.9. So, yes, I think the 2001 bottom will be substantially higher than previous bottoms.