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

To: Trader X who wrote (4100)	12/23/1997 6:05:00 PM
From: Jay M. Harris	Read Replies (1) \| Respond to of 10921

Kevin, go back to the 95/96 cycle and study the six month lead memory prices have on equipment co orders. I have only experienced one cycle in my career. However, I have friends who have been through other semi cycles. You will find that when memory prices bounce 50% semi annually equipment orders increase sequentially. Equipment shares are highly sensitive to sequential changes in equipment orders. The problem is that earnings per share are still very poor. Consequently, the name of this thread is very real. These are cyclical stocks and we don't care if they are losing money in the trough of the cycle! This is normal fundamental behavior for a cyclical stock. This is why equips have peak P/E's in the trough of the cycle and low P/E's in the peak of the cycle. Kevin your logic applies to many other types of stocks in various sectors of the stock market. IMHO, you are incorrect to counsel people on the equips not to buy in the darkest hour. Importantly, history supports that as long as commodity prices are on the rise (leading indicator) the blood begins to dry 6 months out and stock prices move PRIOR to the blood drying. Jay