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

To: Sparky65 who wrote (19193)	5/7/1998 6:19:00 PM
From: jtechkid	Respond to of 70976

street looking for 1.15 billion in rev -eps at 38 cents -alex brown expects the management to revise eps and rev down -how much is the question-book to bill will below 1 -imo around .80alex brown believes eps will be cut 10-20% from the current eps after the conference call.alex brown expects amat to give little or no guidance for 1999-other than the environment remains uncertain until dram profitablity improves. also everybody says these trade 6 months out-blah,blah, well amat going into it first bad quarter-not its last -upcycles last more than a quarter and so does downcycles. the august quarter will be very ugly at best.

To: Sparky65 who wrote (19193)	5/7/1998 7:08:00 PM
From: Gottfried	Respond to of 70976

Sparky65, BTB chart link... geocities.com GM

To: Sparky65 who wrote (19193)	5/8/1998 2:48:00 AM
From: Jacob Snyder	Read Replies (3) \| Respond to of 70976

re:these stocks trade 6 to 9 months out: That has been the historical trend. Certainly, in 1996, the street was not looking more than 9 months into the future, and the stocks didn't rebound until the BTB started trending up. The trough for both the stock price and the BTB was July to September 1996. Profits bottomed in the earnings reported in 11/96 and 2/97, by which time the stock price had already doubled from its lows. This time, the stocks have come well above their Jan 98 lows, evan though the BTB is still trending sharply lower. Opinion is unanimous that 1998 (all remaining 8 months of it) will be flat at best. The range of opinion for the upturn is: end of 98 (optimists) to end of 99 (pessimists). So, the street is buying now (or holding what they bought earlier) based on an expectation of an upturn 8 to 20 months in the future. Why is this? Have all the mutual fund managers become long-term investors? I don't think so. I think what's happening is that we haven't yet reached capitulation. In 1996, the stock price cratered to 30 in January, then rallied repeatedly above 40 for several months, before the real bottom was reached in July at 22. I think we are now about where we were exactly 2 years ago (May 1996), which is why I'm short NVLS and long none of the semi-equips at the moment. If I'm right, I'll buy a lot of AMAT in the 20s. If I'm not-right-but-not-badly-wrong, and the stock remains in the current trading range, then I'll cover my shorts, and go long AMAT in the 30s, sometime in the fall. If I'm very wrong, and AMAT is above 40 in the fall of 1998, then I'll look for some other sector to put my cash into. In any case, I won't lose money, unless NVLS goes sharply higher. At worst, I'll have missed an opportunity. Given the current market climate (euphoric disconnect from fundamentals; disregard for historical patterns), I'm trying very hard not to lose money, and not trying too hard to make money. Maybe I should buy silver and bonds instead of stocks (VBG). What has to happen in order for AMAT to be above 40, 6 months from now? Here's a list: 1. the general market has to remain confident (no inflation, no fed rate increases, decent profits) 2. East Asia has to stabilize, with no more nasty surprises: no revolution in Indonesia, no recession in Japan, no Chinese devaluation, no major pushouts or cancellations by the Taiwanese semis. 3. no exogenous shocks. 4. margins, profits, and chip prices for the semi companies (microprocessor and memory) have to stabilize, with the expectation of a recovery in 1999. DRAM prices have to stop their >>30%/year price slide. 5. the semi-equip BTB has to be trending up. If any one of the above goes bad, AMAT will still be below 40 6 months from now, and possibly below 30. I'll wait and watch, try to ignore the noise, try to be patient.