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.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (10058)	10/30/1997 1:50:00 PM
From: akidron	Respond to of 70976

I guess I'm a market sceptic but an AMAT believer, so for me it goes like this. the market's in trouble because valuations got stretched and people suddenly couldn't see where the growth was comming from. I reckon its coming from companies like amat that are in expanding marketplaces of increasing strategic importance. amat did get ahead of itself, not because the shareprice wasn't justified by next years potential earnings, but because the earnings are potential earnings and there was no room for bad news in the price. I sold. I was lucky - the bad news came think and fast, as there always is bad news when everything looks like blue skies. In truth the bad news was really a myth but the stock reacted. in fact it overreacted. the great thing is that 250 - 300 million shares were traded between 42 and 28 (did anybody really get filled at 28 I know I couldn't find a way) and as in all likelyhood, they were buying shares from institutions that had bought lower and wanted to protect themselves in case of a market meltdown, i think a nice floor has been built. the meltdown has not happened, instead we are looking through an admitedly volitle market at a company that is growing revenue over 30% a year and presently commands a multilple of 13 times next years earnings. I, like kumer, beleive that amat will beat its targets this quarter handily. it has a great stratigic position in a market that will become incresingly stable for the big players, as Fabs do have to be at the cutting edge to compete and to justify the govenment subsidies they increasingly depend on (a polite dig at the pure market capitalists that proliferate on this thread.) it seems obvious that amat is also gaining market share from smaller less well capitalized competitors. the danger to the rosey picture I've painted is the weakness of the overall market, but at these levels most of the downside is in the price... so really the only rational danger to the gamble is meltdown... I can't see it 'cause the US economy seems in decent shape and interest rates are falling which should stimulate capital spending. but just in case I keep cash so that I can buy again. FYI i never short this stock 'cause the trajectory is always up and the downs are fleeting opportunities i don't have the skill or the nerve to exploit.