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

To: scott_jiminez who wrote (6912)	11/15/2002 9:30:53 AM
From: Proud_Infidel	Respond to of 95632

Scott, For some reason, you seem to have an issue with AMAT and the shareholders of AMAT, and you always have. Believe it or not, this sector is bottoming out at the end of a very deep trough but in no way can be termed on life support; AMAT made a profit of $147 Million in case you missed it, in one of the most difficult environments ANY company has EVER faced. Many companies(both tech and non-tech) would be very happy making that for one Q, especially in the environment we now find ourselves in. You appear to have a difficult time with the notion that AMAT is NOT KLIC. AMAT made money this Q; KLIC lost $3.95, and yet you insist that the problems the companies face are equal in nature. Although they are facing the same storm together, some companies have managed to keep their ships upright while others have not- you miss this simple point. Keep up your little diatribes against AMAT and the people who believe in the company; the facts say otherwise. Brian

To: scott_jiminez who wrote (6912)	11/15/2002 10:21:34 AM
From: Cary Salsberg	Read Replies (1) \| Respond to of 95632

I just looked at KLIC's report and noticed that they had negative tangible net worth. I had decided to make some comments on KLIC and, here, Scott serves as a straight man. The issue of KLIC vs AMAT serves as an investment primer. 1. Front End vs Back End - Moore's Law occurs at the front end. The technology is more difficult and more valuable. The unit costs of the tools are much greater and the delivery schedules longer and more stable. Front end companies have greater sustainable competitive advantages, more significant barriers to entry, and a business model that supports a cleaner balance sheet with greater flexibility to deal with an adverse market. 2. The balance sheet - Before I really understood the ideas expressed in #1, I could tell that there was a difference between KLIC and AMAT from the balance sheet. Key relative numbers are cash, debt, inventory, and capital costs (land, buildings, capital equipment). I could tell that there was a similar difference between semi equipment companies and semi companies. Some fabless semis and some analog semis look more like semi equips then their "real men" brethren. 3. A Good Company - There are many "good" companies with excellent management that don't reward their investors. Most of the reason is the specific market and business model. It is very unusual for a company to have a sustainable competitive advantage or significant barriers to entry or a business model that allows for a healthy balance sheet and flexibility and profitability during difficult times. In technology, the few that have these prosper and most of the others eventually fail. 4. The Investor - To expect success in technology investing, the investor needs know what company attributes to look for, how to recognize them, and when they are actually there. The investor must "know thy self". Know what you know and know what you don't. Know when what you know is sufficient to make an investment decision and when it is not.