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

To: michael97123 who wrote (48403)	6/24/2001 2:41:27 AM
From: Math Junkie	Respond to of 70976

I'm starting to become a little less bearish. The following is something I posted on an unrelated thread, in response to a question about whether I thought AMAT and the SOX would break down: AMAT has already broken below its mid-April to May trading range. As for the future, I don't think anyone knows how long the semiconductor industry will remain weak, least of all me. On the negative side for AMAT is that it is trading at 44 times next year's estimates. Doesn't seem like much of a bargain to me compared to past cycles, which leads me to conclude that a repeat of the last cycle's 8X runup is unlikely. My guess is that people remember the quick recoveries from the '96 and '98 slumps and are betting on a repeat. There are plenty of reasons for doubting that it will happen that way. On the positive side is last Wednesday's strength in the leading economic indicators, the improvement in the unemployment figures, and the fact that the three-month average of North American equipment bookings only fell by 2 per cent in May. Those factors were enough to lead me to cancel the limit sell order I had on my AMAT trading position and convert it into a long term position. The basic premise of doing so is that although I believe it could take longer than people think for the industry to recover, I know I could be wrong. If the the price goes down substantially, I will buy more. If the SIA's Global Billings Report of chip sales shows improvement, I will buy more. I do think that as long as chip sales are still falling, any rallies are likely to fail.