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

To: Paul V. who wrote (15294)	2/2/1998 12:45:00 PM
From: Teri Skogerboe	Read Replies (2) \| Respond to of 70976

Paul, This isn't eloquent, but here are my thoughts on AMAT. 1. This is a VERY cyclical industry. 1997 was the 2nd best year on record for capital spending. Normally after a strong year of spending, the chip makers pull in their horns and get "up to speed" on getting the most out of the new equipment they recently purchased. 2. I believe the statement that the No. 2 person at KLA made, along the lines of "From what I see, the industry will be lucky to be flat this year." (speaking of '98). I don't envision great things on the horizon for '99 either right now, BUT I will defer to Jim Bagley of LRCX who I'm certain knows this industry many times better than I do. He stated on the last LRCX CC (~ 21 Jan 98) that IF '98 is weak as he was expecting at the time, he thinks '99 would show improvement over '98. 3. To me, the evidence is overwhelming that '98 will not be a good year for the equipment makers. But, there are many analysts who are still projecting and predicting growth for '98. Jay Deahna of Morgan Stanley is one, but they are AMAT's investment banker, IOW, AMAT helps pay their bills, build those summer homes and Rolls Royces et al that all those bankers "need". 4. People tend to invest in the equipment stocks thinking there will be instant gratification. I just don't see that during the first 2-3 quarters of '98. Concessions to current AMAT Bulls. 1. Much of the bad news is in the stock, IMO. A question that I can't answer is what the next step? meaning does the next round of news bring better news or worse? IMO, we are likely to see the BTBs get weaker from here. 2. It is a much less dangerous stock now than it was when everyone was cheerleading so hard and heavy and bears were tossed off any semi-equip thread as being hopelessly brain-dead. Robbie, I'm sorry I was awful yesterday. I could have been much more tactful (no joke). I think we should all remember to not take this bull/bear stuff personally. The fundamentals will price this stock, not our chatting about it. Regards, Teri