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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (3821)	12/15/1997 11:45:00 AM
From: HB	Respond to of 10921

DAK, I've found the information in Infrastructure often quite useful. Like all of us, they are not perfect at timing.... they were too cautious in June '96 in my opinion (even selling some KLIC rather near the bottom, I believe), and while they sounded notes of caution near the recent top, and sold some things, they did not sell massively. I know it can be hard to sell. They may be right that an AMAT warning would take things down further, but I think it might just confirm the scenario that is already mostly priced in, and have less effect than people think. Returns on Infrastructure's Daily Notes portfolio, a model of somewhat more active trading than their monthly portfolio, have gone from over 200% since Jan 1996 a few months back, to something on the order of 30% since Jan 1996 recently. I think some of us may (I know I have at points) get infatuated with this sector; when a sector portfolio has outperformed the market by several times, it could be a signal that significant selling is in order. Let's not forget, for instance, as some tend to when focussing on forward growth rates during an (anticipated) upswing that this sector sees profitability drop much faster than sales in a downturn, and typically many companies incur losses in a downturn. And, it is more cyclical than many other sectors. Nevertheless, it looks cheap here and I think the main -- and quite significant -- risk is in a 25% or so correction in the overall market along with significant Asian impact on semi cap equipment sales... the latter seems priced in now, but conjoined with a general decline you may be surprised how irrational Mr. Market can get. I am pleased to be getting back into a few companies (so far BRKS on Fri and SFAM on several occasions) that I think have stories just about as compelling as ever, and extremely attractive valuations now with plenty of cash from well-timed secondaries. Best of luck to us all!