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

To: akidron who wrote (18528)	4/4/1998 3:33:00 AM
From: Big Bucks	Respond to of 70976

Aki, I'm in awe, good argument! Have you been drinking again?<VBG> BB

To: akidron who wrote (18528)	4/4/1998 7:40:00 AM
From: Dr. Bob	Read Replies (1) \| Respond to of 70976

Hope everyone reads akidron's post. This is a very well-reasoned argument, and I'm anxious to hear the rebuttal. I also have AMAT puts (though I started buying two weeks ago, when they cost a lot more), and have posted similar arguments on the KLIC thread, though not nearly as comprehensively as akidron. You might write off jtechkid, who's been saying the same thing for even longer, because he says it so frequently and he has kid in his name, or Big Bucks, who's been bearish for a while, as just a bear (even though he's been right most of the time), but how do the bulls answer akidron's observations? Bob

To: akidron who wrote (18528)	4/4/1998 8:09:00 AM
From: Steve Byers	Respond to of 70976

bye the way, forgot to mention this yesterday when we spoke, but one of the market indicators I have watched for a while is a model PW uses to run its Tactical Allocation fund... model input is expected return on s&p and changes in return on the 5 year and tbills, and calculates expected excess return in the equity sector... the model has been 100% equities for nearly 5 years, and went to 25 % cash on Wednesday... AND bye the way, the time before 1993 that it was meaningfully in cash was in August 1987... so the move on Wednesday could be very interesting...it gets rerun monthly, so wont see another move until May1, but interesting, Wednesday is the day I went short amat in a meaningful way, right after call from my broker on the asset allocation model shift... just my 2 cents on a bigger picture comment...

To: akidron who wrote (18528)	4/4/1998 12:29:00 PM
From: Chuck Williams	Respond to of 70976

Outstanding comments, Aki. Quick question. ATML releases earnings Thursday. Did they warn?

To: akidron who wrote (18528)	4/4/1998 3:33:00 PM
From: Paul V.	Read Replies (1) \| Respond to of 70976

akidron, >IF AMAT MAKES $1 this year... is 37 x earnings for a co with declining revs a sustainable price... the answer has to be no... THERE ARE JUST TOO MANEY PLACES FOR CAPITAL TO FLOW WHERE RETURN IS MORE CERTAIN.... AND IF THERE CEASE TO BE PLACES FOR THE MONEY TO BE BETTER INVESTED IT WILL SIGNAL THE START OF A LARGE CORRECTION BECAUSE IT SIMPLY MEANS THAT ASSET VALUES HAVE BECOME TOO INFLATED. My poiint is that no matter how long term your view is, the $$$$ in the market will gravitate to places of certainty, and if it finds none, it will leave the market alltogether... and GSCO, LEH, MSDW, AND BARS (THE SHOPS THAT HAVE SUPPORTED THE RUN THIS WEEK) will be amoung the first to go... not because they're evil... but because its their job to protect the $$$ of their investors...< Your logic makes perfect sense. However, from my experience I have found that the market in the past has not performed logically--how high a PE that the Market will place on AMAT I can not predict. It's high to the information which Gottfried posted was 50 at its highest. Now, I believe it is 20. These extremes is what is confusing, I believe, to all of us and is why I am letting the statistical data of supply and demand, and DW TA charts and IBD Data charts dictate what I do. However, I am a long term investor who got into AMAT at $26 5/8 presplit in 10/96. Currently, I see AMAT running up to the $41-44 then reversing down about $6.00 since it just broke the triple top. The problem in trying to time the movement is that I may be Ying when the Market may be Yanging and I get left out of a Big Upturn. In charting IBD'S R/S data, AMAT's R/S chart has just formed a Double top at 57 and within 7 of reaching the Bull Support Line which it broke the first of March going as low as 36. The IBD Accumulation is holding at a "B" rank, the % VS 10 wk average reversing back up to 3% from a low of 1%. It's high was 20% the first of March. The return on Equity is holding at 19% while the Group Strength is at an "E" with the Sub-sector-equipment at 194 out of a low of 197. Only OilGas-Cdn Exp&Prod (195), Mining-Gems (196) and Oil & Gas-Drilling (197) is lower. My point is that statistically and looking at the TA charts, it appears that they are showing a lower downside risk than an upside risk for those who ride it out in the near future. With the upside potential being far greater than the down side risk of being out of the market I have chosen to stay in the Market. I just do not want to make the mistake of being on the sideline if the Market and AMAT continues to move up. Each person has to make their own decision based on his/her tolerance for risk. Naturally, the above is only my opinion and the data which I have reviewed from the Dorsey Wright site and after obtaining the Friday IBD Newspaper. Readers are reminded the old saving, "caveat emptor (buyer/reader beware)." Paul V.

To: akidron who wrote (18528)	4/4/1998 3:42:00 PM
From: SMALL FRY	Respond to of 70976

Aki, Outstanding argument. Now, I understand that you've gone to puts. I covered my ST short position Friday and am into cash. I'm looking at trying some Put position (for the first time). Can you steer this old warhorse to the barn? I'm looking at May 35(ANQQG) and Jul 32.5(ANQSZ) Puts. You seem to be the only one making money on options lately...can you comment on my picks? TIA, SF PS: A private commentary would also be appreciated if you don't wish to make it public.