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To: uu who wrote (12259)	5/10/1998 8:44:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 25814

Addi: ---- First re: AMAT and semi-equips: It is no wonder that companies release these kinds of "surprises" on Friday evenings and not Monday mornings! Gives everyone some time to guess and 2nd guess and triple guess their decisions in the next few days. My first inclination was "ha! I knew it - business is sucking big time for the semi-equips - perhaps even worse than 1996". That would imply immediate selling on Monday morning. After all if it turns out to be worse than 1996 then AMAT and esp. all the big caps in the semi-equip area have a long long long way to fall. Then again after a couple of nights of sleep now I'm not so sure of the immediate impact. It really depends on the expectations built into the current price. Were most of the people in AMAT right now expecting an earnings surprise? Very unlikely. Are most of the people in right now value investors who will hold regardless? Unlikely - too early. Are most momentum investors? Very unlikely. [Then again what the heck was the SB analyst doing a few days ago???] Putting it all together I would figure an initial thumping to 32 and maybe a slow decrease to 28 (or a fast decrease to 26 if the earnings release is sad as I expect it to be - one thing that I like about AMAT is that they do no cover up crap in their releases) and then more violently lower when the market tanks or any other macro factors take hold. Now if Fideity and their ilk are still in these stocks forget it - they will dump and dump severely and you will have AMAT under 30 by Wed. evening - guaranteed. I just don't follow AMAT too closely anymore to get a feel for the reaction. Over the intermediate term the range of 32-38 should be knocked down to say at least 24-30. And then lower if things turn out to be really really bad or the market tanks. [The one +ve here is that the market may be happy with the cost reductions. 10% of labor costs is quite significant. If the stock goes up as a result of this you can bet it will be met with waves of selling.] --- Shane.

To: uu who wrote (12259)	5/10/1998 9:04:00 AM
From: shane forbes	Read Replies (2) \| Respond to of 25814

Addi: RE: AMAT effect on LSI - (1) This is a toughie. Even though LSI has gone down on relatively low volume (and therefore in the absence of disastrous news one would think it would thereby rebound - but disastrous = AMAT news) it just shows how jittery and what weak stomachs most investors/traders have when it comes to putting money in LSI. Overall I don't blame them but it just amazes me. [If AMAT did not announce I bet we would be at 27 in a heartbeat. My guess is that some of the money on Thursday that vacated the market on Thurday did a stock shift and got into some of those really good stocks that took a beating from Mon-Thurs. Others in "weaker" n/t stocks like LSI also must have joined the party in the rush to "quality" stocks that were thumped over the course of Mon-Thurs.] ---- I checked the listing of the stocks that institutions dumped the most in q4'97 and you guessed it - LSI made it big time. 16% of shares owned by institutions were dumped in q4 - now we are around 38-40% in institutional money in the stock. (Believe it or not only OXHP and one or 2 others were more dumped than LSI on a % basis. Amazing. Then again I too dumped so I can't fault others!] (As an aside, this is about the lowest it has ever been for LSI since early 1996. If you remember in its heyday LSI was at 80-85% institutional interest. We dropped to 70% and then 55% and now 38% in 3 distinct mass dumpings. If you are a contrarian you have to like this!) The silver lining with the lack of institutional interest is that LSI is not going to be unceremoniously dumped by big guys since there aren't many big guys left!!! This is primarily dependent on individual investors' opinions and I guess those involved in sector bets - the sector effect is more crucial since I would make the case that LSI is doing very well business-wise. ---- Shane.