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To: shane forbes who wrote (12265)	5/10/1998 9:28:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 25814

RE: AMAT effect on LSI - (3) Unfortunatley the little red guy - Satan's little ogre - will win out in the stock market over the short term. Though the stock did respond reasonably well on Friday once it went below 25, it did not rebound with much conviction. Whenever I see a lack of convicition I think of money in a trading range. Could we see 22 - sure. Could we see 19 - perhaps. But this time you can bet that I will be loading up - this is very different from the Oct. LSI announcement of no business. We are at about the same level - low to mid-20s with a much improved outlook. I'll be buying in - even if I have to sell some of my "surer" short term bets. At 22 I figure - very easy double in a year. At 19 - I can guarantee a 150% return in a year. Not too shabby. You can bet 19 or more likely 20 will hold in a disaster. --- (Also important to put my LSI buying in perspective. I figure for me my current 8% position in LSI is "cautious" optimism - 12% would be "average" aggressive and something like 15-18% of total assets would be "very aggressive". Will have to see just how far I want to build up the LSI portion. Have no issue about going up to 10% n/t.) (Note to Addi: Important to not put too many eggs in one basket! Even though LSI will likely do quite well, if you are thinking of "retiring" by 2000, the horizon is a bit tight. Depending on portfolio size and horizon, the typical %ge for the equity portion should be around 7% each in about 12 stocks. That way things won't be disastrous if one or two falter. I have at least 15 more years before I even think of retiring and besides I do not have very large sums of money involved and I will be working again one day soon - so if LSI one day is associated with the Edsel, I figure, no biggie, I'll earn it all back.) --- (Incidentally it isn't a big surprise to me that Win 95 and Win 98 releases and semi weakness (esp. the PCs area.) are happening at the same time. Though the superficial reasons are quite different this time the weakness is not a coincidence! Last time it was more exaggerated because of the short availability of chips - thus severe over-ordering in Q3'95 with sales that did not materialize in XMas'95 and thump nothing in chip orders in Q1,Q296. Of course now the Win'98 release is for summer - coincidentally a weak chip season. Another reason to say poopie to Bill $50 Billion Gates.) --- Shane

To: shane forbes who wrote (12265)	5/10/1998 1:49:00 PM
From: Grand Poobah	Read Replies (1) \| Respond to of 25814

Shane, I don't think there should be a big effect on the semi stocks from AMAT's announcement. But that doesn't mean there won't be one. My reasoning is that this really isn't a surprise. Everyone knew that semi-equip was in trouble. I think we agree that the main cause is the DRAM overcapacity combined with a mild slowdown in MPUs and PCs that have caused those companies to tighten their belts for the short term. It is the semiconductor equipment industry that is in trouble (for the next few quarters) and not really the semiconductor industry. In fact I have been buying semi stocks with good faith that they will do well while at the same time waiting to buy into some semi-equip stocks that I really like for fear that they will continue to suffer during the current drought. (https://www.siliconinvestor.com/readmsg.aspx?msgid=4378374) Actually I already knew in general about AMAT's belt tightening and thought they had announced in some form. But maybe not. Sometimes it is hard to remember what you heard from friends and what was publicly announced. While I can't predict what the average investor or the institutions are going to do, I am perfectly comfortable differentiating between the fortune of semi and semi-equip at the current time. G.P.