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

To: Jacob Snyder who wrote (25161)	10/10/1998 7:33:00 AM
From: Justa Werkenstiff	Respond to of 70976

Jacob: Great post. I believe you are correct. AMAT's price decline of late has been caused solely by stock market conditions on top of poor sector conditions. The only way I envision AMAT going much lower is if they preannounce in this emotional market. Otherwise, if the market rallies and takes AMAT up and AMAT then comes out with a preannounce, the effect will not be to drive the price down below its lows. This is exactly what happened with the last preannonce in July when compared to June prices. You got a better deal in June buying the correction than you did in July with the preannounce after the market rallied. And as time goes forward, here is no reason for AMAT to keep selling at a lower and lower prices as the end of the down cycle is now closer than it was, say, three months ago unless one maitains we are in a huge, never ending bear market. I agree that AMAT is expensive when compared to some other semiequips in the same capitalization category. But this is what the market is giving us investors and at some point you have to take what the market gives you or run the risk of grasping at air as AMAT moves up in price with the overall market with a beta bounce that will leave people here staring in awe. Now if you are bearish and believe the market and the economy and the whole world are coming to an end, then you should be on the Treasury Note Thread on SI and not looking to buy AMAT at any price point. I think the correction will be good for AMAT and this sector. Much of the money stuck in wild high or no P/E stocks has been shaken loose and will have to find a new home. This sector provides a nice haven on a valuation and growth basis. ** This message has been sponsored by SEMI and my portfolio <GG>.

To: Jacob Snyder who wrote (25161)	10/10/1998 10:57:00 AM
From: KLINVESTOR	Read Replies (1) \| Respond to of 70976

Jacob, <<One of the expensive lessons I've learned is always buy the best. You pay for quality, and in the end, it is almost always worth it.>> I agree with this statement in general and would always buy Coke instead of Pepsi because Coke's dominant position will continue to derive superior returns. But in the semi-equip sector the comparisons are not as easy. AMAT is clearly the biggest player by far but they do not compete in many equipment lines and have nothing in the test or test handling area. The same is true of other niches in the equipment sector so my point is that there are companies that dominate their respective niche but are much smaller in revenue and potentially have less competition than AMAT does and higher margins than AMAT has. These companies still have significant growth opportunities in the next industry rebound (as does AMAT) and are also potential acquisition targets in the future for larger companies like AMAT wanting to move into that particular sector. Teradyne is a good company and on a smaller level Cohu has the strongest position in test handling equipment by far and extremely good margins and finances. Neither competes with AMAT yet and both trade at significantly lower multiples. I very much agree with your comments on MU and INTC. It is as if no one wants to hear good news these days. If you go back a year ago and listened to the posts when this slide began no one wanted to listen to bad news. Unfortunately I did not listen to the bad news on the horizon at that point but I do think there are some positive signs out there. Only time will tell. Good luck!