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

To: Jerome who wrote (48978)	7/10/2001 8:52:52 AM
From: robert b furman	Read Replies (1) \| Respond to of 70976

Hi Jerome, I do not think that semi equip comp. are to be paralleled with the photonic/fiber optic comp. JMHO The semi equip co. bottomed out in mid Oct of 2000. Since then, they have staged a very good looking base that has just recently formed AND HELD a secondary consolidation.The strength of this consolidation is confirmed by past posts of some good short term traders, who in the process of scalping short term short positions at the bottom - have missed initiating long term buy and hold positions at the lower price regions of this sector's stocks. JMHO The reality of this sector's charms are many : 1)They are the creators of products that will benefit from a LONG TERM GROWTH THAT IS ACCELERATING AT AN INCREASING RATE.Don't get me wrong this acceleration has cycles.The relatively quick peaks and valleys is one of this sectors GREATEST ADVANTAGES. So much so, that the news ALWAYS exagerates the time of recovery and IS PERHAPS one of the best timing keys in the marketplace. 2)Unlike the telecom industry - which is jockeying to get control of the next generation utility industry - most players have cash to upgrade and do not rely on debt for expansion.i.e. Intels steadfast capital expansion plans of 7.5 billion that has held all year ( 2001 ). 3)When the lead gorilla of the sector invests in technology upgrades - its competitors must soon follow or find themselves in the low margin old generation commodity pricing business.As Morgan says so correctly - "you must pay to play ". 4)The maturity of this industry has resulted in evolving technology upgrades which carry the innovative companies thru the troughs of the cycles (cash to continue R&D) to more dominance at the capacity expansion peak of the next cycle. 5) These cycles have been repeated regularly to any historical student of the sector - Gottfrieds charts are more than proof and an outstanding source of confidence to me. I am not a guru on stock trading by any means. I don't expect to buy perfectly at the top or the bottom.What I do expect to do is catch the in between 70 % of this sector's cycle run. It will reward the patient investor much more than the pultry scalps being made during the bottoming out process of this sector's stocks. It is my opinion that a portfolio is maximized by selling early before the top (and this is where conservative shorting REALLY PAYS ACES) and quietly accumulating large positions during the multiple spikes down that continue to play out at both the lows of the climactic selloff (last October) and the lows of this consolidation stage(currently ongoing). It is my opinion that the consolidation stage will be longer than most expect(since the blowoff of price mark up in February/March of 2000 was admittedly a historical record in terms of price mark up and volume). So what we're seeing is quiet accumulation that will take time to heal.It is possible that a new low will be established(October of 1998 proved it can occur).If it does it will be a gift.- of which I'll margin up into heavily. I think key to this consolidation is this : the longer it takes - the better the stocks are - as far as mounting a solid and successful recovery in the future. So buy on the dips,hold to benefit from capital gains tax treatment.The real money to be made in these stocks is to be long and accumulate in this bottoming process.Shorting will pay aces and spades in 2003- it is overplaying a trading range in 2001.JMHO Thanks to all who make this thread a great place to lurk. Bob