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

To: Steve Byers who wrote (10240)	11/2/1997 7:59:00 AM
From: akidron	Respond to of 70976

absoultly argree with your macro caution, it is what drove me to sell at 100. at these prices i'm a buyer tho. as fear is the mother of all opportunity.

To: Steve Byers who wrote (10240)	11/2/1997 12:56:00 PM
From: orson sanderson	Read Replies (1) \| Respond to of 70976

Steve, agree that things are not rosy and can turn nasty with the latin america shake out and even russia and greece are being rocked. deflation or slowdown is a real possibility. how much cash% are you holding? regards

To: Steve Byers who wrote (10240)	11/2/1997 1:34:00 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

An alternate scenario: The labor markets in the U.S. will certainly continue to tighten, but only at the high end. The pattern of the last 30 years is that highly educated people find their skills in great demand, and get steady wage increases, while anyone with less than a college education (and increasingly that means from a good University, with a science or other "real" degree) finds their wages steadily falling. The minimum wage is actually lower now, discounting inflation, than in 1955. So there will be wage inflation, but only in some parts of the economy. Companies will try to pass these increases in wage costs on to customers. If they generally succeed, then we get price inflation, Fed tightening, and recession. However, I think that most companies will (continue) to be unable to raise prices. In a global economy, there is unused capacity somewhere, or at least someone who is willing to accept lower margins for increasing market share. So, rather than seeing inflation in the next few years, I think we will see pressure on profits. Over the last 10 years, profits have increased in the overall economy at a rate much greater than the historical average, and much greater than sales increases. I believe this is coming to an end. There will be a Darwinian selection. Those companies and industries with good management, brand names, and efficient production will be able to pay the higher wages, maintain prices, maintain profits, and reward shareholders. Those that can't, won't. It's going to be harder to pick rewarding stocks in the next next decade than in the last 10 years. I don't think what is happening in SE Asia really matters much. The truth is that the economies in trouble are still very small. The U.S. doesn't buy or sell much with them. If the Dow is going to drop 500 points because of bubbles bursting in Thailand, rational people should consider this a buying opportunity. Soros is a speculator and a gambler; what happens to him shouldn't bother investors. AMAT is my largest holding, recently made larger, because I think it is one of the few companies in one of the few industries that will continue to achieve EPS growth of 20% + in the future.