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

To: michael97123 who wrote (50410)	8/11/2001 1:34:13 PM
From: scott_jiminez	Read Replies (1) \| Respond to of 70976

Michael (and Zeev): I completely understand your heartfelt conviction(s) that this time is different, that it shouldn't even be phrased in those terms because there are so many circumstances which render historical data distinct from 2001. I also understand that the trite truism, 'If you don't learn from history, ....blah blah' can be used to defend either side of this issue (i.e. learning from history can tell us EITHER 'each cycle is different' OR 'the similarities between the cycles are striking'. Chosing one interpretation over the other is simply a reflection of your agenda.) Perhaps the reposting of an exchange I had on Donald Wennerstrom's thread a couple weeks ago will be helpful: ======================= (The following posts were written entirely on 8/01/01): 1. A post by 'John Q Public ' - Equipment stocks will definitely go higher...eventually. Right now they are way ahead of themselves. Folks seem to think earnings are just going to magically bounce back. They are currently treating the chip and equipment stocks like internet startups. Does anyone here honestly believe that earnings and revenue will recover as fast as they dropped, that they will be able to jump back up onto the cliffs they fell off of? Most of the companies have fallen so far that they can't even SEE the cliff any more. Message 16158023 2. My response (again, written ENTIRELY on 8/1/01) *********June 15, 2000*********** Equipment stocks will definitely go lower...eventually. Right now the demand for all-things chip justify the stock valuations; no way are the stocks ahead of themselves. Folks seem to think earnings are just going to magically disappear. They are currently acting as if the internet contagion implies the chip and equipment stocks should tank as well. They are acting as if the fact that our sector has earnings (EARNINGS!) and the slot coms don’t and won’t doesn’t make a difference! It does; you just watch: by August, 2001 the chips and equipment stocks will be double their current levels while all that internet junk will be down, say, 50-60% Does anyone here honestly believe that earnings and revenue will just vanish as they fast as they appeared last winter? Ah, to return to those halcyon days of just two months ago, April, 1999, when our confidence was REALLY high. Well, not to worry: we know that the demand for chips won’t slow measurably even if the internet goes bust because the diverse application of chips provides a buffer against the old-time boom and bust cycle. This time really is different. So does anyone here really, honestly believe global demand will just PUFF! dry up overnight from the broad and high stable plateau it currently occupies? Regardless, most of the companies have grown so large and have such a range of products that their revenues – and their stock prices – are relatively immune to any moderation in economic activity. Someone else mentioned that he thought 2001 would be a very tough year and the stocks in the sector would be about 50% lower by August, 2001. In my view, this is an inexperienced investor who, at the first sign of troubled waters, overreacts, and sells far too soon. Some of the best returns come on these temporary dips. Well I guess at least once person believes earnings just vanish into thin air! Fifty-percent! Do people really think earnings climb this long treacherous mountain…and then just fall off a cliff?? The reliability of earnings places this sector upon such a high and privileged status that it can’t even see down to the cliffs anymore. Message 16158212 ======================= [Be sure to appreciate that my post is pure fiction, written to incorporate and condense numerous actual posts appearing on SI during the period of the date indicated. In addition, it's a shame but unfortunately true I must state in the most simplistic terms possible my point: whereas we had unabated enthusiasm and very vocal justification for a bullish 'This time is different' last year, we have an equally sincere and ardent population of SI contributors right now providing very vocal justification for a bearish 'This time is different'.]