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Politics Formerly About Applied Materials

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To: mitch-c who wrote (60827)	2/21/2002 3:31:03 PM
From: willcousa	of 70976

I spent a number of years working for several defense contractors. I would guess that spin-off technologies from defense R&D are pure happenstance. On the other hand, when they happen they can be very big. If you think defense boondoggles are big you should see the procurement that takes place elsewhere in government. Would you rather have the use of a $10,000 cast aluminum toilet seat or the results of $10,000 given to one of Jessee Jackson's organizations?

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To: Katherine Derbyshire who wrote (60828)	2/21/2002 3:34:18 PM
From: Cary Salsberg	of 70976

RE: "The underlying technology of the Internet itself will be forced to stabilize as the installed base grows." I am not sure what you mean by "stabilize." I would think that the Internet is primarily a "word" based system, now, and the world wants a real-time, full motion, audio/video based system. The Internet is primarily a wired access system, now, and the world wants a wireless access system.

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To: Jacob Snyder who wrote (60683)	2/21/2002 3:58:31 PM
From: NOW	of 70976

nice post...

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To: John Trader who wrote (60826)	2/21/2002 4:18:51 PM
From: michael97123	of 70976

John, Once again stymied and the news re: economic growth has been better than i expected. But the market is the market. Jacobs posts are great and so are cary's but the last cary post i read had him selling cc on amat at 50. Just missed and i had followed him in as well and just missed the price. So where do we go from 1716. My mental bottom for this decline has been 1700, a full 150 points below 1850-2100 range nas had been trading in for quite awhile. I think i will lower that by 50 points. 1850-2100, then 1650-1850, then the last stand perhaps in jacobs world 1400(1388) to 1650. My numbes are just benchmarks based on nothing technical. I dont expect to see new lows for nas but this 1650-1850 range might take a long time to get out of on the upside. Will be intersting what the mindset will be if and when we get back to 1840-50. mike

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To: Cary Salsberg who wrote (60832)	2/21/2002 4:32:33 PM
From: Sam Citron	of 70976

I am not sure what you mean by "stabilize." You both raise good points. I think Kat's point is simply that the boom often monetizes the rosy scenario very early on in the adoption cycle. Thus the stabilization that she refers to may be a gradual dampening process in the amplitudes of future internet-related boom busts. It may take several more years for 30 frame per second wireless MPEG video on $99 handheld devices to become a reality. Whether you call such a change incremental or revolutionary is up to you, but it will surely usher in a Schumpeterian avalanche.

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To: mitch-c who wrote (60827)	2/21/2002 4:49:57 PM
From: Jacob Snyder	of 70976

ST trading: bought 1/3 of my trading position, at 43. Have a pending buy (same size) at 40, and pending sells at 47 (for the trading position), and also sells at 50, 55, 60 for my longer-term shares. AMAT is actually holding up quite well here, considering what the market has been doing. We are still comfortably above support at 40, and more than 50% above last year's lows. By contrast, look at WCOM or EMC.

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To: Cary Salsberg who wrote (60832)	2/21/2002 4:55:25 PM
From: Katherine Derbyshire	of 70976

Technology stabilization on the Internet can happen at several levels. The most fundamental is mostly invisible to users: transmission protocols, hardware infrastructure, that sort of thing. That's the equivalent of railroads needing to use the same gauge in order to switch cars from one line to another, and has mostly already happened. The next level has to do with data formats: how does the receiving device know what it's getting? How do you squeeze words, pictures, sound, and other kinds of data down the same pipe? At some point, a given format (HTML for words, possibly MP3 for audio, who knows what for video) will gain critical mass and no further innovation will be possible or desirable. I disagree, by the way, that the world wants a real-time, full-motion, audio/video-based system. I've got broadband now, but very rarely bother with sites that depend on multimedia. If I want information, reading is faster. If I want entertainment, I've got a TV, a stereo, and a DVD player. Early web+TV combinations have not been terribly impressive. Similarly, at some point a last-mile solution will gain critical mass and people will stop thinking about it, just as they long ago stopped thinking about their telephones, electricity, and plumbing. I'm not convinced that the world is screaming for wireless access, either. Devices small enough to be portable have some pretty serious usability limitations for all but highly targeted services (messaging, traffic reports, that kind of thing). And for heavy duty web use, even a 56K landline is barely fast enough, and that's much faster than most of the wireless choices. Except for a small fraction of early adopters, people generally won't buy technology just because it exists. It has to be "better" than the existing alternatives in some way. Blackberry has been successful because it's better (more versatile, more portable) than a text pager. Palm OS has been successful because it's better (more portable) than a paper planner. I have yet to see an application that convinces me that wireless web is better. Katherine

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To: Jan Crawley who wrote (60829)	2/21/2002 5:27:07 PM
From: advocatedevil	of 70976

If I recall, you should be bookin a couple $K with that short play. Nice win. Unfortunately, I was unable to trade AMAT today and missed out on the bear action. I'm not currently holding any short-term AMAT plays, but perhaps tomorrow... Geez, pretty ugly for the techs today. Tomorrow should be interesting - take 'em out behind the barn and shoot 'em down, or give 'em a brief rest like yesterday before continuing the torture? Good luck with your trades Jan! AdvocateDevil

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To: advocatedevil who wrote (60838)	2/21/2002 5:34:20 PM
From: BWAC	of 70976

The barn burnt down. They'll have to do the shooting out in the open.

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To: John Trader who wrote (60826)	2/21/2002 6:03:01 PM
From: Jacob Snyder	of 70976

John, re boom/bust TALC: 1. in order to have repeat patterns of boom/bust, you don't need anything other than unchanging human nature. We are hard-wired to overshoot in both directions, making wrong predictions based on linear extrapolations of recent events. In the longer-term, patterns of change (like any specific technology-adoption vs. time) are never linear. They are S-shaped, or approach an asymptote, or a sine-wave. Or even random, a scatter plot. But in the short-term, the simplest pattern for us to recognise, is a linear pattern. And we have to recognise patterns, whether they are there or not, to stay sane. Our minds seize (using either definition of that word) onto a linear pattern, fall in love with it, and ignore data that might warn us that reality is diverging from the expected linearity. When the dissonance gets too large, we make a sudden, painful, and costly adjustment. That is what causes booms and busts. Until we re-wire the human brain, all our gear won't change this. 2.<<This situation seems a lot different than previous cycles to me in that the internet, bandwidth, and chip speed are all going to experience major growth going forward.>> Define "growth". Growth like the airline industry has had? That industry is about 80 years old now, and there is a consistent longterm pattern of more people flying more miles, bigger airports, bigger airplanes, faster airplanes, etc. Lots of growth. But there is also a consistent longterm pattern, that stocks in airlines go up and down randomly, and then go to zero. 3. I probably overstated the case. The TechnologyAdoptionLifeCycle isn't always boom/bust. But it frequently is, and it is now, with internet/telecom. Tentatively, I'd say the defining characteristics of a boom that has to end in a bust, is: a very rapid infrastructure buildout, financed with borrowed money. If the buildout happens slowly, with a succession of niches being serially created, then people won't get as excited, there won't be that "gold-rush" frenzy that we saw in 1999. If the buildout is financed out of cash flow of existing companies (something that will only happen in a slow buildout), then any misadventures (like putting hundreds of satellites in orbit to serve the non-existent sat-phone market) won't result in the wholesale defaults/delisting of corporations. 4. my main concern, the reason I think we may (medium-term =2003-2004) see lower stock prices in the telecom/internet services/equip area, is that the excesses (that caused the 2000-2001 Bear Market), have not been wrung out of the system. I see a bottom and a rebound in the fundamentals, but I also see a huge unresolved overhang of Moral Hazard, bad debts, over-enthusiastic stock and bond-buyers. At the bottom, PEs (using trailing GAAP EPS) should be single-digit. Maybe, with Fed Funds <2%, I'd stretch that to forward PEs around 20. Anything over that is a Bubble that hasn't deflated completely yet. At the bottom, capital should not be available. Corporations should not be able to raise money (by selling stock, bonds, anything) to buildout infrastructure to serve any unproven market. 5. So far, the impact of the internet, has been less than the changes caused by mass-adoption of railroad, or car, or telephone, or telegraph. And far less than the printing press. Each generation where those technologies became widely available, experienced the same "this-changes-everything" wide-eyed wonder that we have with the internet. We can speculate that, eventually, the internet may have a greater impact.

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