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To: Rick Storm who wrote (343)	4/26/2002 9:08:34 PM
From: Cary Salsberg	Respond to of 13403

RE: "Why cant chips and equips follow telecom down?" They can, they might, but they shouldn't. Some, of course, should, and either have or will, but the quality semis and equips are far higher quality businesses than most of the telecoms, have had real track records of success which preceded the bubble, and have a bright future. Most have had very high valuations and some of this is being corrected, but true long term investors will pay a premium for the prospect of reliable above average growth, and many have been burned by unreliable smoke and mirrors growth.

To: Rick Storm who wrote (343)	4/26/2002 9:42:16 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 13403

<<doesnt it worry you that....>> Yes, it does bother me. I would have been more comfortable buying AMAT at a P/S of 1, at the bottom. But it didn't happen. And if it was going to happen, it would have happened by now. The GDP numbers, the semi-equip bookings numbers, most of the CCs I've listened to, Intel re-starting shelved fab projects, it's hard to see tech stocks taking out the 9-10/01 lows when we're getting news like that. Valuations are too high. I've said this for a long time, and I haven't changed my mind. Ignoring the trough numbers (2001 and 2002), and using recovery numbers (2003), makes the valuations better, but still too high. The Bubble just doesn't want to deflate completely. I could easily be wrong, but I'm thinking we don't take out the 9/01 lows, until one of two things happen: 1. another exogenous shock, worse than the WTC + anthrax. Losing the war on terrorism. 2. inflation and/or a falling dollar, forces the Fed to raise ST interest rates, many times. LT rates also go up, and higher mortgage rates causes a collapse in the housing sector. That, in turn, causes the long-awaited contraction in consumer spending, and the second leg down of the W-shaped recession. I'm betting that 1 doesn't happen (soon, anyway), and 2 doesn't happen this year. I'm betting this current intermediate-term dip ends with the Nas in the 1600s, and then we go on to Nas 2100+ (above the 1/02 high). I'll probably use a bit of margin on this dip, and be back to 20-40% cash by the time we get back to Nas 2100. Really, this isn't any change from what I've been doing for 2 years: buy the dip sell the rally repeat repeat repeat

To: Rick Storm who wrote (343)	4/27/2002 1:49:09 PM
From: robert b furman	Read Replies (1) \| Respond to of 13403

Hi Rick, I think it is important to keep in mind that Semi equip mfrg stocks were the first to fall out of bed.As a group these stocks had plummeted quickly and first bounced in October of 2000.They once again had a hard downward bounce in April of 01 and a final third slap back down to Oct 00 lows in Sept 01. Many of the headline stocks that are hitting new lows now were the last rotation of winners in the last days of thew 00 distribution top.That makes them the last sector to experience the final shakeouts before The Bear is Dead is declared. I think that is what we're seeing now. The semi equip companies are experiencing initial orders from those top shelf companies that know continuous improvement is the only way to survive.These are new technology buys that through yield enhancement and production efficiencies better margins are maintained. This does not mean a widespread capacity expansion is going to occur - however the laggards will be forced to keep up and that will conmtinue the business environments improvement. The semi equipment stocks historically are the leaders.The long time cycles to implement their technology enhancements require action prior to the economy proving itself. Although difficult and often tenuous one has to believe that the past cycles will reappear in the future.An awareness of the historical past is helpful in maintaining the Belief. Additionally due to the tremendous swings created by excess capacity AND technological reinvention - these companies boast bullet proof balance sheets - most often featuring hordes of retaining earnings in the form of cash or highly liquid investment and NO DEBT. These companies are a bastion of transparency in accounting and have historically been wonderful providers of business matrices like orders,booking,backlogs with quite credible forward visions except when the backlogs go the way of cancelations and pushouts. To assign a higher multiple because they are debt free,straight forward in their accounting practices, and have high commitments to R&D that regenerates the next cycle and need for their equipment is the market actually operating quite logically. I for one have always felt these companies deserved a higher multiple than they were given - simply because they are viewed a volatile and cyclical.But that's just my opinion. Hope that helps Bob