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

To: Ian@SI who wrote (30536)	5/24/1999 9:22:00 AM
From: kdavy	Read Replies (1) \| Respond to of 70976

From briefing.... DLJ's Tom Galvin is suggesting investors overweight consumer staple stocks, and is removing Applied Materials (AMAT), Dayton Hudson (DH), and Home Depot (HD) from the firm's focus list.

To: Ian@SI who wrote (30536)	5/24/1999 9:36:00 AM
From: Ramon V. Frias	Read Replies (1) \| Respond to of 70976

to all, CNBC is reporting that DLJ removed AMAT from its focus 1 list among other cyclical tech stocks. Didn't they reiterate their buy recommendation after earnings last week? Must be rats deserting a sinking ship. Ray

To: Ian@SI who wrote (30536)	5/24/1999 10:25:00 AM
From: Sun Tzu	Read Replies (1) \| Respond to of 70976

OT -- My last word on this, since this is not the focus of this thread (I'll be happy to discuss it on the AoI thread). Perhaps, it wasn't just luck...their fundamentals weren't permanently changed Actually it was pure luck. The time span of synthetic buy backs is typically 2~4 months, often closer to two. The market started to decline in August and made a double bottom in Sep. and Oct. Then it took off with a vengence in Nov. For the companies to report substantial losses, it was only necessary to the lift off to be delayed till January (that could really whipsaw some companies). What is more, many of those companies who lost on the options, rolled them over (i.e sold even more puts to buy back their then in the money puts) or asked for stock delivery. Either way, the quick recovery saved their necks. The point I am making here is that while their fundamentals may have been sound, there is no reason to believe that they could not have stayed "undervalued" for another few weeks. And that would have been damaging. Furthermore, I know a few structured derivative specialists. They buy and sell their concoctions purely as measure of volatility (i.e. they assume a random walk). The fact that they've managed to stay in business and make a lot of money, indicates that over a two month period, stocks are more random than not. Hence, it was luck of the timing that saved those companies. regards, ST