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

To: Skeeter Bug who wrote (8744)	11/20/1998 6:30:00 PM
From: Math Junkie	Read Replies (1) \| Respond to of 42834

<<i wasn't buying amat when sales were strong>> I didn't say you were, I was just trying to make a point about the folly of relying on current earnings as an indicator in an extremely cyclical industry. <<anyway, the btb is is a ratio and can be misleading.>> That's why I went on to give the percent increase in actual bookings. <<did you expect amat to pop 50% with business in its current state>> No, not at all. I expected a more gradual increase, beginning when the S&P 500 bottomed. I certainly have no quarrel with the notion that the sector may have gotten ahead of itself, or with the idea that we may have a correction. I'm just a little less pessimistic that you about prospects for semi equip sales in '99. Everyone's talking about "V-shaped" and "U-shaped" recoveries, as if those were the only two possibilities. <<if dram companies losing money after an "upturn" is good then wall street is, shall we say nicely, optimistic ;-) >> Before we can get utilization up, we have to see prices stabilize. That much has happened. As I said earlier, "necessary but not sufficient" conditions are not enough, by definition, but their occurrence is still good news, as they represent one of the events which must take place before true recovery can occur. As for losing money, I haven't kept track of whether DRAM companies are making money, but I was under the impression that they were no longer selling each unit below cost. Nevertheless, DRAM is not the whole industry. The rationale behind my expectation of gradual improvement in equipment sales is that other sectors of the industry will recover first (as witness Intel), and DRAM will recover later.