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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (6206)	7/26/1998 9:09:00 PM
From: Hank Stamper	Read Replies (2) \| Respond to of 42834

"Amat and Kla are no brain purchases from where I sit. It is just a matter of how much money one will earn after purchasing and holding them during the next upturn in the semiconductor cycle. These two companies are clear winners but may be dead money near term." Since there are no signs yet of a recovery in the chip-making business, AMAT and KLAC are likely to be dead in the near term. I don't follow KLAC but I know some people are making a little profit trading AMAT. That stock has been trading in a range between 26 and 32 for the past several weeks. The fundamentals are as bad or worse than the last bottom in the semi conductor capital equipment business cycle yet the stock price is way higher than the bottom last time. This suggests that the price really ought to be a lot lower than the 30ish it's at now. It really 'should' be in the low 20's or lower. But, the brokerage recommendations are generally "buy" and the institutions are into the stock and holding on. There is a good chance that the institutions will wake up and start selling the stock down to a level comensurate with its fundamentals. I've nibbled at AMAT (at 27) but will not buy more unless it goes below 25 or, there began to appear real signs that the chip makers were beginning to build new fabrication plants. Best wishes, David Todtman