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

To: Ian@SI who wrote (47155)	5/23/2001 10:44:36 AM
From: michael97123	Read Replies (1) \| Respond to of 70976

10 on the downside or in the hundreds on the upside, and we are all smart. Quite a range. 10 can happen in a period of extended stagflation like the 70's or something similar to what has happened in japan. Hundreds can happen with a quick return to last years remarkable gnp growth. This is not for the timid, is it? My feeling is that we can see slow growth for a period so my downside would be in the 30's and i will use the old high as a cap thru mid 2002in case of return to growth scenario. mike

To: Ian@SI who wrote (47155)	5/23/2001 5:15:43 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 70976

re: Under what conditions (AMAT at 10)? A severe recession, of the kind we haven't seen since 1973 (so long ago, it has totally faded from investor's frame of reference). We would see a wave of bankrupcies among semis (similar to what we are currently seeing in telecom). New fabs would be shut down, and be for sale at distress prices (near zero). Under such economic conditions, bookings for semi-equip could slow to a tiny trickle of tech buys, and stay there for 6-18 months. Not a prediction (I don't think AMAT gets to 10, either), but it is within the realm of possibility. And it is certainly useful to watch for the danger signs that precede such an scenario.

To: Ian@SI who wrote (47155)	5/23/2001 7:47:35 PM
From: Cary Salsberg	Respond to of 70976

Ian, AMAT at $10 is equivalent to $40 (low $22) in the '96 time frame and $20 (low $25) in the '98. Check this month's semi-equip bookings and compare it against the low bookings in '96 and '98. "What would have to happen" is a change in market sentiment. The global economy for tech doesn't need to change much from the current state. If investors begin to believe that improvement will come much more slowly and that companies will suffer losses, previous valuations might reappear. Since my buy range for AMAT is from $25 to $40, I don't believe $10 is probable, but reasonable?, yes, posible?, yes. Cary