Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (58642)	7/14/2003 2:11:06 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

"Do I have to read it all?" Nope. Folks are bullish just about everywhere. They don't seem to be the least concerned with any the obvious negatives that keep being reported about the economy, earnings, visibility, IT & Cap Ex spending. Higher production costs (PPI), oil remaining near $30 a barrel & the inability to raise prices due to excess capacity isn't raising concerns about the negative effect this will be on earnings. CPI is not seen as a problem even though higher costs for food, gas, health care, state & local taxes, etc., are eating into consumer spending. Growing unemployment is now being spun as a signal that the economy is about to improve. I don't hear anyone express concern that it could mean the ecomomy might be slowing. Like I said, the talking heads were saying last month that Q2 doesn't matter. If that's not bubble talk, what is?. They said that now it all depends on significantly improved guidance & visibility for the 2nd half of the year. So far that hasn't happened either, yet the market keeps ramping. No worries (or shall I say - no 'Wall of Worry')! AG will keep printing $$$ & cutting rates. Ya! That's the ticket! Nothing but blue skies as far as the eye can see. BTW, I realize your trading does not depend on current or near term fundamentals. Normally, mine doesn't either. It's just that every time I decided to quit fighting the trend & join the bulls, we'd get more economic reports confirming that the economy was headed toward recession or at best, slow GDP growth. Those consistently poor fundamentals meant there wasn't going to be dramatic earnings growth any time soon. I just could not overlook the ever growing disconnect between the relentless ramping of equities prices & the lack of confirming fundamentals just about across the board. I kept fighting the trend as it seemed to me that I wasn't the only one who could see how bad things were getting. Obviously I got it wrong. However, I'm not inclined to join the bull camp now either. I wouldn't go long in here with someone else's money. That must mean there's plenty of upside left in the market.

To: RR who wrote (58642)	7/14/2003 5:49:55 PM
From: Sully-	Respond to of 65232

<font size=4>Applied CEO still sees cautiousness<font size=3> Also: Company says will consider stock-based pay By Chris Kraeuter, CBS.MarketWatch.com Last Update: 4:48 PM ET July 14, 2003 SAN FRANCISCO (CBS.MW) -- <font size=4>Applied Materials {AMAT} CEO Mike Splinter, atop the world's largest producer of chip-manufacturing equipment for less than three months, said customers remain hesitant about ordering new, leading-edge tools. "Our customers are being pretty cautious about adding capacity," Splinter said. "The utilization in their [advanced] factories is quite high and reaching levels where in the past they would have started to order in an urgent fashion."<font size=3> Splinter spoke on Monday at an analyst meeting in San Francisco held in conjunction with the chip-equipment industry's largest trade show. See full story about Semicon West show. As part of a broad chip-sector swing higher on Monday, Applied Materials (AMAT: news, chart, profile) shares rose by 4.3 percent to $18.14. Ahead of both of the analyst meeting and the trade show, Splinter spoke with CBS MarketWatch. You can hear the full interview on Yahoo Platinum. Preparing for what could be a flood of orders by many chipmakers, Splinter said his company is ready structurally and technologically for an upturn in business. "We can operate successfully at this level of business yet be ready for an upturn," Splinter said. "We have the capacity available." Despite the cautiousness, the Santa Clara, Calif.-based company said there are positive signs. CFO Joe Bronson cited "positive feelers" during his presentation at the analyst meeting. "The business environment is improving." Dividends and stock options Also on Monday, Applied Materials said it has no plans to issue a dividend. "I don't think a cash dividend buys you very much, and it puts us in a different category of investment that I don't want to be type-cast as," Bronson said. He also said he would discuss with Splinter and the board of directors about following Microsoft's (MSFT: news, chart, profile) lead in the switch toward stock compensation and away from options-based compensation. Last week, Microsoft shocked the technology industry when it announced it will abandon the granting of stock options to employees in favor of stock grants. See full story. Options have been a major form of compensation for technology employees, but the accounting surrounding options has come under increased scrutiny. Applied Materials' top finance executive said he "applauded" Microsoft's move. "It's not that I'm against expensing options, but you can't measure the inputs," he said, referring to accounting techniques used to assign values to the options. "You can't run a company like that. We run Applied on the basis of predictability and our ability to manage inputs and outputs." <font size=4>More cuts to come? The company has undergone quite a transformation in the past year. Applied has made two rounds of layoffs, affecting a combined 3,750 workers, or about 23 percent of its staff, since November. The most recent round of cuts, in March, also involved the closure of 19 buildings and 30 offices. The company's stock has increased some 50 percent since then.<font size=3> The restructuring decisions were made before Splinter joined Applied Materials. In May, he left Intel (INTC: news, chart, profile) where he ran global sales and marketing for the world's largest maker of chips. Splinter's newness hasn't stopped him from bringing his own ideas to the company. "I've really tried to look at the organization and streamline the company to be more efficient, more responsive to customers and to be more accountable," he said. <font size=4>Asked about the possibility of more layoffs, Splinter said the company is still working on the restructuring announced in March.<font size=3> Chris Kraeuter is a reporter for CBS.MarketWatch.com in San Francisco. cbs.marketwatch.com{AFD9C9E7-616B-415B-8E9E-77E48E6F6834}&siteid=mktw

To: RR who wrote (58642)	7/14/2003 7:34:36 PM
From: Sully-	Respond to of 65232

Could it be that this bull my be timid? Merrill Analyst Is Bearish on Second Half By Paula Lacê Markets Reporter 07/14/2003 03:28 PM EDT Click here for more stories by Paula Lacê Amid mixed signals on the economic front, a few bears are starting to show their claws. Richard Bernstein, chief U.S. strategist at Merrill Lynch, is the latest one to voice concerns, saying Monday that investors' hopes for an economic and corporate rebound in the second half are overly optimistic. Bernstein said only four of the 10 indicators that he follows suggest that profits will be stronger than estimates, and that these indicators are based on technical factors. In the past, he noted, such technical factors haven't been followed by a recovery in corporate earnings. The technical factors include Merrill analysts' raising profit estimates for various U.S. companies and a better performance of three of the firm's portfolios of "low-quality," or risky, companies. But fundamental indicators, such as the firm's Inflation Composite Indicator, or the gap between what companies are reporting and what analysts are expecting, are still neutral, Bernstein said. "We continue to believe that earnings expectations for the second half of the year are too optimistic given these indicators' readings," he said. "There were several instances in the past in which our technical indicators gave positive signals, but our fundamentals did not agree. Each time, the signals of the fundamental indicators proved far more important." Bernstein also said he finds it "astounding that investors continue to pay substantial premium valuations to take risk, and pass up the opportunity to receive compensation for relative safety," suggesting market participants are overlooking safer stocks and paying high prices on riskier investments. He predicts profits in the second half won't be as robust as many experts believe because companies continue to face decreasing pricing power. He expects inflation to remain tame until year end. Bernstein suggests that investors use the recent rally to sell lower-quality, or riskier, issues and continue to screen for higher-quality companies, or ones that pay dividends and have healthy balance sheets. But he warns that "such companies are a true scarcity." thestreet.com