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

To: Steven C. Vartan who wrote (5232)	8/31/2002 2:10:20 PM
From: Sarmad Y. Hermiz	Read Replies (1) \| Respond to of 95879

Steven, these are incredible statistics. I might even dare to say not credible statistics. At peak of market 4000 funds now 4800. Need trend to reverse to signal an end of the bear. I thought that in 2000 there were over 10,000 funds. So if there are 4800 now, that's a nice reduction. The vacancy rate in the first Q of 2002 for homes rose to 9.1% which is the highest level since census started to track in 1960. I don't know about this one either. There aren't any empty houses where I live. And since actual sales figures show housing (both new and used) at historical all time levels for units, how can there be so many vacancies. Please enlighten, if you feel like it. But if you don't that's fine. I'll dig into into it some myself. Very ominous numbers, if true. Sarmad

To: Steven C. Vartan who wrote (5232)	8/31/2002 2:28:30 PM
From: Cary Salsberg	Read Replies (1) \| Respond to of 95879

RE: "S&P 500 selling at 34 trailing and 27 forward compared to 15 historical average and 10-12 at market bottom." Apples to oranges? We are in a recession, a post bubble aftermath. Earnings are very low compared to historical performance and future expectations. The "historical average... at market bottom" doesn't provide any information about the economy or the relative level of earnings at those bottoms. Also, no information about inflation or interest rates which influence PEs. RE: "Funds have 4.6% cash compared to 10-13% in past bear market bottoms. Capitulation phase will get ugly since funds don't have cash will need to liquidate stock. At peak of market 4000 funds now 4800. Need trend to reverse to signal an end of the bear." In the past, there were not as many money market funds and investors did not have the easy flexibility to transfer money between stock and money funds. We just had record outflows from stock funds and about half the amount went into bond funds. Again, the numbers may be apples to oranges. RE: "Housing equity down to 55% of value. The vacancy rate in the first Q of 2002 for homes rose to 9.1% which is the highest level since census started to track in 1960. They perceive we are in a deflationary bear market which is worse than a garden variety recession. Many individuals and companies are doing the reverse of what makes sense in this environment which is loading up on debt." What is a "deflationary bear market"? To avoid redundancy, bear = lower prices = deflation, I will assume it is a bear market and a concurrent deflationary economy. The economy is technically NOT deflationary, now. It is incorrect to say companies are "loading up on debt". They loaded up during the bubble and are trying to shed debt. They are selling off assets to repay debt and some are even declaring bankruptcy. The exceptionally low rates are not causing business to borrow and invest. Individuals are taking advantage of historically low rates to refinance. Most choose to increase debt levels because they can manage more debt at lower interest rate levels. Again, the housing equity number, 55%, needs to be placed in historical context against historical interest rate levels. RE: "They are also bearish on semi and semi equipment primarily since they perceive all the end markets are weak." We are in a bubble aftermath. "Weak", today, isn't the key to investing, if, indeed, "weak" is correct. How long will they remain "weak"?