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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (2505)	3/29/2002 9:00:27 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95622

Why do semi equips outperfrom early in a cycle? Predictability. Don, I think perhaps it is because in order to lower cost of production and increase profitability semiconductor companies must order new capital equipment early in a cyclical recovery. Consider Intel's new P-4 processor: marketwatch.com The latest P4 chips available next week will be made using 200mm wafers, but in a month the P4 2.4 GHz is expected to be made from 300mm wafers. Also, the chips are made using 0.13 micron technology. The 300mm wafers combined with the processing technology at 0.13 microns results in lower costs and higher performance. As the recovery kicks in companies order new equipment due to increased demand and higher profits. Just like TSM I believe INTC and MU among others will soon up their capex expectations. It seem fairly dependable that the semi equips will run higher first. This may be the reason but if not then I guess dumb money piled on dumb money? I trust you had a great trip? Glad to have you back. Thank for the tables which we are now burying again. So... when are you starting your web site? <ggg> RtS

To: Donald Wennerstrom who wrote (2505)	3/29/2002 10:30:14 PM
From: Cary Salsberg	Respond to of 95622

So, not only was I wrong, but you have demonstrated that I didn't bother to do empirical research. Thanks! <g>

To: Donald Wennerstrom who wrote (2505)	3/29/2002 10:37:59 PM
From: Cary Salsberg	Read Replies (2) \| Respond to of 95622

I think that the semi-equip "leadership" might be tied to their greater cyclicality and greater volatility. I suspect that the 1998 data might support this, but the bubble had an unusually severe effect on the semis so the 2002 might not. If you are willing, check 1/8/98-10/8/98 and comparable months in 2001.

To: Donald Wennerstrom who wrote (2505)	3/30/2002 10:43:38 PM
From: Gottfried	Read Replies (1) \| Respond to of 95622

Don, thanks for the tables! In your absence we decided you should start a web site. :) Some unrelated tidbits... Look who underperformed AMAT for a decade finance.yahoo.com ...and BW on the "dumb investor" effect businessweek.com excerpt High volumes of trading, narrow bid-ask spreads, and other measures of liquidity are generally seen as signs of a healthy stock market. But evidence has mounted in recent years that periods of high liquidity are usually followed by periods of poor returns, both for individual stocks and the whole market. Harvard Business School professor Malcolm Baker and Harvard University economist Jeremy C. Stein think they have found the culprit: "dumb investors." In a new National Bureau of Economic Research paper, they say the extra liquidity is provided by irrational investors who drive prices unsustainably high. During buying frenzies, such as the Internet stock bubble of the late 1990s, it's as if "the inmates have taken over the asylum," the authors write. Liquidity rises when dumb investors are active because they ignore subtle market signals that other investors heed, and thus they are happy to buy when others are selling. Dumb investors can also be overly pessimistic, the authors say, and then they simply withdraw, reducing liquidity. The "dumb investor" effect is not small. The authors calculate that when the turnover of shares is 12% higher than its long-term average, stock returns in the following year are 4% below their long-term average.[snip] not terribly profound. Gottfried