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

To: Sam Citron who wrote (11624)	9/17/2003 1:47:58 PM
From: Cary Salsberg	Read Replies (1) \| Respond to of 95888

Sam, 1. If you present a chart of small cap v. large cap performance (stock price), my first inclination is to wonder what the business performance was (revenues, EPS). 2. My recommendation was not based on general market history or even semi and semi-equip market history. It was based on my understanding of the semi and semi-equip business, my knowledge of many of the specific companies, and my view of the future of technology. 3. I am very conservative, so my inclination is to minimize risk. In many cases high risk companies perform better than low risk companies. In the areas I am interested in, I don't believe the difference in performance will compensate for the additional risk. 4. I realize that my position does not lend itself to message board discussion. Many hold that the key to successful investing is the ability to move against the crowd. As I see it, the crowd concentrates on momentum, technical analysis, and superficial valuation metrics based on very recent performance. I concentrate on a valuation method which depends on a company's competitive advantage and financial model. In essence, I was saying that, while the worst of the bubble aftermath is over, technology has always been very risky and the current situation is still more difficult than normal. Also, the dot-com bubble demonstrated that the market and the financial community are exceedingly clueless with respect to technology and that technology prices easily disconnect with the reality of the underlying company. 5. It was very important, in 2000, to have a sell plan and a parametric reference to guide it. The same will be true for the current move up. Obviously, the sell plan must move against the crowd. Part of understanding the value of a company is knowing when the market has discounted future performance. This is the parametic reference for sell decisions. "Quality" companies are ones with understandable, reliable, superior track records. "Superior" gets the profits, but "understandable" and "reliable" helps to take them.