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

To: Cary Salsberg who wrote (52805)	9/21/2001 2:31:12 PM
From: Sam Citron	Read Replies (1) \| Respond to of 70976

Why not attempt to adjust rankings for valuation? Quality is wonderful but quality at bargain price is even better.

To: Cary Salsberg who wrote (52805)	9/21/2001 2:53:15 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

With AMAT, what we are seeing now is the second step-down of this bear market. The first lasted from April to December 2000. Then we had a long, long bear rally, a flat-to-up period lasting all of 2001, up to 9/17/01. This plateau part-way down, corresponds to similar horizontal areas of the chart, from end-1997 to mid-1998, and also in the first half of 1996. The future will be: 1. this stepdown will continue until a bottom, somewhere, is reached. At my last purchase at 27.5, the P/S is 2.6. Given the (relative, very relative) strength the stock has shown, I doubt we reach a P/S of 1. Maybe 1.5, is my WAG. The 1998 P/S low was 2.2, the 1996 P/S low was 0.9, those data points, IMO, give a rough range for what we can expect for the low. 2. then, we are going to have a bottoming period, a time when the stock moves for months in a horizontal range. Any low will have to be retested, at least once. The rebound off the initial low, that is, any 30% rally of the stock, will be a selling opportunity, and I will sell into it. And buy back later when we retest the lows, thus lowering my cost basis, if I am nimble enough. The bottoming period in 1996 and 1998 each lasted about 2 months. This time, since we are facing "exogenous shocks" and a recession, in addition to the sector downturn seen in 1996 and 1998, I think the bottoming period is likely to be longer. 3. I now think it is a virtual certainty that semi-equip bookings show no increase, for the next 6 months. And no sustainable rally in the stocks is going to happen until then. Investors are not going to anticipate an increase in bookings, sentiment is too poor. They will wait for hard data. The small month-to-month increase in bookings in the last several months was a headfake, noise in the signal. The trend is, I am certain, flat or down, into 2Q02. AMAT may bottom when INTC announces 2002 capex. It won't be 7.5B (vsg). 4. Only after a bottoming period, a retest of the lows after a 30-50% rally, is there any chance of a sustainable uptrend. My guess is, the very earliest this could happen is 2Q02. So, I've got time till then to trade it, selling the rallies, buying the dips, all in increments, trying to get a position at a cost somewhere near the lows. The hunt is up, the hounds can see the fox, but he hasn't been cornered yet.

To: Cary Salsberg who wrote (52805)	9/21/2001 3:00:31 PM
From: Sam Citron	Read Replies (1) \| Respond to of 70976

Interesting Economist article about tech cycles implies we are in the second phase of Schumpeter's 5th industrial wave: "The first phase was a heady upswing as successful participants—in cotton, railways, motor cars, electrical goods, petrochemicals or whatever was the technological driver of the day—enjoyed fat margins, set standards, killed off weaker rivals and established themselves as leaders of the pack (today, think of Cisco, Intel and Microsoft). Then came the second phase as the market matured and the dominant firms hunkered down for slower growth. The final phase, a short and sharp decline, occurred when a whole new set of technologies started jostling for the attention of investors." economist.com