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Technology Stocks : FSII - The Worst is Over? -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (2086)	7/11/1998 7:16:00 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 2754

The table below shows market cap of the 41 stocks based on Friday's close. I was trying to check for correlation with respect to the amount of each stock's reduction from their 1997 high. Supposedly, the higher the market cap, the less would be the loss. It is rather hard to see if there is any correlation, but one way of doing it is looking at the average loss of 57 percent and counting the number of stocks above and below that value in the four quarters of the table. That exercise shows: > 57 percent < 57 percent In the first 10 stocks 7 3 In the second 10 stocks 1 9 In the third 10 stocks 2 8 In the last 11 stocks 2 9 A person could argue that there is some correlation, however, there was certainly no salvation in the big cap stocks. AMAT, the first stock in the table is down 45 percent. Hardly a safe place to put your money. 07/10/98 SHARES MARKET CLOSE OUTS CAP PERCENT SYMBOL COMPANY PRICE (000) ($M) CHANGE AMAT Applied Materials 29.50 365,627 10786 -45 ASMLF ASM Lithography Holdings 30.38 138,000 4192 -43 KLAC KLA Instruments 27.06 86,873 2351 -64 TER Teradyne 26.38 83,510 2203 -55 NVLS Novellus Systems 35.06 33,835 1186 -46 ETEC Etec System 34.00 22,063 750 -49 LRCX Lam Research 19.13 38,219 731 -71 SVGI Silicon Valley Group 15.88 32,590 518 -58 DPMI Dupont Photomasks 33.38 15,169 506 -54 PLAB Photronics 18.19 24,397 444 -42 CMOS Credence Systems 20.19 21,649 437 -63 CYMI Cymer 15.06 28,850 434 -69 WFR MEMC Electronic Materials 10.25 40,511 415 -74 UTEK Ultratech Stepper 19.06 20,889 398 -45 KLIC Kulicke & Soffa Industries 15.50 23,312 361 -73 PRIA Pri Automation 16.06 19,608 315 -73 SFAM SpeedFAM 17.50 15,950 279 -71 HELX Helix Technology 13.25 19,832 263 -59 ATMI ATMI Inc 14.19 18,178 258 -66 EGLS Electroglas 13.00 19,704 256 -63 COHU Cohu 24.06 9,705 234 -57 VECO Veeco Instruments 24.75 8,966 222 -66 WJ Watkins Johnson 26.75 8,253 221 -28 FSII FSI International 9.56 22,849 218 -59 LTXX LTX 5.38 35,334 190 -34 IPEC Integrated Process Equipment 10.06 17,712 178 -73 ASYT Asyst Technologies 12.31 12,019 148 -74 SMTL Semitool 8.50 13,789 117 -68 BRKS Brooks Automation 11.00 10,113 111 -72 GSNX Gasonics 7.38 14,046 104 -68 CFMT CFM Technologies 11.44 7,931 91 -72 MTSN Mattson Technology 5.19 14,480 75 -68 NANO Nanometrics 8.63 8,610 74 -37 MASK Align-Rite International 15.06 4,876 73 -37 AFLX Adflex Solutions 8.25 8,826 73 -71 IMSC Integrated Measurement Systems 7.00 7,544 53 -65 SFLX Smartflex Systems 7.00 6,374 45 -60 TGAL Tegal 3.75 10,566 40 -67 MICN Micrion 8.31 4,063 34 -70 PHTN Photon Dynamics 3.38 7,271 25 -60 ASEC Aseco 3.75 3,715 14 -80 TOTALS 645 1305808 841632 -57 AVERAGE 15.72 31849 501

To: Donald Wennerstrom who wrote (2086)	7/12/1998 9:01:00 AM
From: Joe Dancy	Read Replies (2) \| Respond to of 2754

Awesome investment philosophy and analysis Don. I'm still a buy and hold guy and always will be due to tax and transaction cost inefficiencies that harm your total return - plus the fact that I'm convinced it is very difficult to time markets, the experts are no better than us. I will say this though - holding a company in this sector means that you should think seriously about adding when things are cheap (like now) and reducing when things get fairly or overvalued. I do that with all of my holdings to some extent, but from your tables it is critical to maximize returns. While no-one can time accurately I'm convinced, once you've held a stock for a while you know when it is more fully valued or when it is being given away. Your note that "FSII and PLAB have essentially equivalent growth rates of 30 and 31 percent respectively (using yesterday's closing prices) over the 8 years starting in the fall of 1990" is a real interesting take - especially after PLAB's fall last week. Based on valuations only I've been adding MASK (competitor) the last year or so instead of PLAB so did not get whipsawed this time anyway. I got my Individual Investor magazine and noticed they note Adflex "shares have plummeted, and if you haven't already bailed, sell now." I guess they abide by the theory buy high, sell low. Geez, I think now would be a good time to add to any position there. I'm not an shareholder and have not taken that bait yet. Like you say there are a hundred ways to make money in the market, just find one you are comfortable with that apparently works. Joe