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To: Jacob Snyder who wrote (3367)	12/21/2002 3:43:37 PM
From: Sam Citron	Read Replies (1) \| Respond to of 13403

I will start going long AMAT at 10, not being fully invested until 5 Assuming that AMAT is under 20 on the third Friday of January, I will take my first 1600 shares at a net cost of $16.10. I will then join you in a buy program, but I plan to take my second helping at the previous low of around 13, as I think there is still a reasonable chance of forming a double bottom in that range. I'll have my third bite of the apple at 10, if I am lucky enough to see such a price. At 5, I will try to scrape up enough courage to join you for a last plunge. <g>

To: Jacob Snyder who wrote (3367)	12/21/2002 9:12:07 PM
From: Cary Salsberg	Respond to of 13403

RE: "What you're saying..." 1. AMAT "deserves" a valuation premium relative to most other tech stocks; 2. Ceteris paribus, AMAT "deserves" a valuation premium relative to its historical low valuations because, now, it is a stronger company compared to other semi-equips and chips are a larger part of the economy and will grow even larger. 3. Statements 1. and 2. do NOT make AMAT's prices "immune" to the effects of the economy. I believe AMAT's price is appropriate for the current economy and the generally accepted view that the economy will continue to improve and technology will follow, albeit more slowly for a while. 4. You are posing an economic scenario characterized by words such as "scared" and "cracks". That sounds worse than any economy I have witnessed in my lifetime. I am not "saying" that AMAT's price will hold at any level in this kind of environment. 5. I don't agree with your "basic reasoning". You have bought into the "deflationary" recession idea. I see monetary (rates and liquidity) and fiscal policy being used with abandon to keep the economy going through the 2004 election. With tons of money floating about, stocks and real estate will benefit. We will pay the piper only if and when it becomes evident that inflation threatens to get out of control. I don't see "scared" consumers. I don't see "scared" lenders. Marginal behavior will reflect debt levels, employment levels, rates, and liquidity, but I don't see any Japanese or Great Depression type "doom and gloom." I think the American people have shown great resiliency in the face of the effects of the bubble, the 9/11 attack, and a new war on terrorism. I will not bet the farm against your scenario, but I am even less comfortable betting the farm on it.

To: Jacob Snyder who wrote (3367)	12/22/2002 11:07:20 AM
From: Sam Citron	Read Replies (1) \| Respond to of 13403

Jacob, I agree that At some point ... 3. consumers get scared enough to start saving, lenders get scared enough to stop all sub-prime lending (to consumers, businesses, and governments 4. consumption finally cracks (with incomes flat, consumption contracts enough for significant deleveraging to happen) However, I think that this point marks the theoretical nadir of the business cycle, rather than an event that is destined to transpire during this business cycle. Intelligent policy measures by the Fed can forestall or prevent the final reckoning scenario that you have so eloquently portrayed. Interest rates can and should go up again, though not to the moon. [How does your interest rate forecast jibe with your zero-inflation forecast?] Housing prices can stabilize without falling into an abyss. Consumers can adjust their marginal propensity to save without necessarily sending the economy off the cliff. Default rates on sub-prime loans can rise without choking off ALL sub-prime lending. The consumption engine can temporarily stall without "cracking". And capex can stay in a rut for over a year without signalling doomsday for companies with sufficiently strong balance sheets to weather the storm. The reckoning day that you envision can only take place in a "loss of confidence" environment such as we are now witnessing in Venezuela. But it is not a foregone conclusion that the US will suffer the same fate. The latest Michigan and Conference Board confidence numbers do not confirm your dour predictions. They are consistent with a US economy that is no longer in a recession and is actually in recovery mode. Sure it may recover slowly and in fits and starts. That would not be unprecedented. As it recovers it is likely to bring up the rest of the world with it. Your prognistications have taken on such a pessimistic cast of late that it makes me even more bullish because you and many other young investors have already acted on your beliefs by disinvesting and hoarding cash. This is probably the first significant bear market that you have encountered as an investor and it has shaken your confidence in the economy. My prediction is that once you catch the slightest whiff of inflation in the breeze, which runs counter to your zero-inflation forecast, you will desert your depreciating cash and come running back to your favorite asset class, the cheap tech gorilla, regardless of whether AMAT is selling at $10 or even $20. Sam