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   PoliticsFormerly About Applied Materials


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To: StanX Long who wrote (60863)2/22/2002 1:16:55 PM
From: Proud_Infidel
   of 70976
 
StanX/All,

I would appreciate posts to a new thread I started. There are many very intelligent people here, who could contribute much to this.

Subject 52456

Brian

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To: Katherine Derbyshire who wrote (60892)2/22/2002 1:22:01 PM
From: StanX Long
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Your posted, Describing this as a soft landing is sort of a scary thought.

Ask one of my many friend that was laid off and have yet to find a job, how soft this feels?

Stan

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To: Katherine Derbyshire who wrote (60828)2/22/2002 1:43:03 PM
From: mitch-c
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OT - Evolution of Communication Speed
I actually wrote a grad-school paper (ca. 1994) on this subject, with an eye on business decisionmaking. In short, we've moved from an environment of fast messages with little content (heliograph, semaphore, etc) and slow messages with large content (couriers, sailing ships) to increasing both speed and payload.

The theory of constraints says *some* limiting factor remains. Until fairly modern times, the limiting factor on "good" decisions was timely information. Therefore, organizations evolved to delegate decision power to the local (geographic) level - viceroys, governors, "factors," and such. Distributed, but uncoordinated.

With the advent of mechanical and electronic communication, the speeds increased the geographic spans of decision power, and organizations responded by becoming more centralized - coordinated, but not distributed. For the first time, *too much* information became available, and it needed to be filtered - thus evolving the clerical functions of "middle management."

Now, much of that filtering can be done electronically, but the challenge of managing data saturation is a concern for *everyone* in a company, not just senior executives. Many line-level employees have to apply the judgement skills (and take the risks) that were reserved to the (now shrinking) middle-management. Conversely, risk-averse managers have a greater temptation to succumb to the sin of micro-management while sacrificing effective people-management.

My conclusion (at the time) was that organizations which emphasized trust and judgement at ALL levels were the ones that would succeed in an "information" economy. Coordination AND distribution were the keys to success.

So, how is this AMAT related? Well, I wrote that paper the year I was working (as a contractor) at Applied's Austin facility, and I was fascinated by the culture. The company basically served as the template for my conclusion. I haven't had any reason to change my assessment of the *culture* since - although the company has endured some fairly traumatic business cycles.

- Mitch

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To: Katherine Derbyshire who wrote (60892)2/22/2002 1:51:26 PM
From: Jacob Snyder
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re: Maybe Alan Greenspan really is a genius?

Certainly, without the Fed's aggressive action, we would have seen the complete shutdown of the capital markets in late 2000.

In the 1800s, before there was a Fed, with completely unregulated markets, this is what happened, repeatedly. With the railroad buildout, there were repeated booms and busts. In boom times, capital was available to build parallel rail lines out to empty spots on the prairie. In bust times, no one could get any capital for anything. Even the best-run companies, run by honest people, would run out of cash with lines 90% complete.

IMO, the Fed has done little to decrease the excesses of the Bubble. By contrast, they have aggressively lowered rates and increased liquidity, to avoid a (worse) downturn. The problem with this is, it builds up Moral Hazard (rescuing decision-makers when they lose their gambles). I suppose you could argue that we'll see the Bubble deflated in steps, like a balloon with a tiny intermittent pinhole in it. But there is no historical precedent for that. The robust historical pattern, is that BigBooms (rapid buildouts financed with debt) always lead to BigBusts. And the conditions that have existed at the bottom of those BigBusts, has not happened yet. Which is why I think most of the talk about 10/01 being THE Bottom, is wishful thinking.

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To: John Trader who wrote (60849)2/22/2002 2:13:08 PM
From: Jacob Snyder
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John, Michael, Maurice:

I've been on a roll, since late 2000, and made no big bad calls. But, before that, I've made some really horrible calls. Look at my posts on the WCOM thread in mid-2000. I thought WCOM was a Safe stock, a Value, at 40. I was loaded up by 30, and held all of it, all the way down to 13. So, please, don't think I'm a genius, just because my recent track record is good. I'm not.

I do everything in increments, precisely because I don't think I or anyone can call specific tops and bottoms. My AMAT sell at 50 didn't happen. But I offloaded all my TXN at 30, giving me the cash to buy back now. At some point the Bull Market will resume. Or maybe we get a Bear Rally that lasts a year, and brings the Nas (temporarily) to 3000. I spend a lot of time guessing, and post my guesses, but I am likely to be wrong a significant fraction of the time. And I change my mind a lot.

Where I am now, and Guesses-of-the-Day: At the beginning of this month, I was 35% cash. This week, a lot of buy points have been hit, in EMC, AMAT, CSCO, TXN, and CMH. As of today, I started using margin. Last October, I had posted I wouldn't start using margin until the Nas was tetesting it's October lows (1400). I'm buying more at higher levels (started using margin at Nas 1700, down from intermediate top of 2100) , because I now think we don't retest the October lows. I was very encouraged by the conference calls I listened to this earnings season. IMO, liquidity and a (modest) rebound in the fundamentals will put a floor under stocks. I expect that managements for tech companies will be cautiously guiding analysts to raise forward earnings/sales/margin expectations, and this has to be good for stocks. But war and valuations will put a ceiling on stock prices. In particular, I think our government is committed to overthrowing the Iraqi regime, a job much more difficult than the Afghan war. This can't be good for stocks.

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To: Jacob Snyder who wrote (60899)2/22/2002 2:20:37 PM
From: Cary Salsberg
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Sanity Check!

Are there 2 Jacob Snyders?

The previous "Jacob Snyder" post said the 10/1 bottom is wishful thinking. This "Jacob Snyder" post says you started to use margin.

Will the real "Jacob Snyder" please stand up!

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From: runes2/22/2002 2:40:36 PM
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OK - now we have NAS 1700 and only one week left in February.

...which also means that we have fallen back to the level that the market was at the day before 9-11. The difference is that then the economy was getting worse, now it is getting better.

....There should be good resistance at 1700 and that will (hopefully) stabilize the market. Lot of economic numbers next week but most likely these will reflect slow but steady improvement.

...The big event for semi equips will be NVLS mid quarter earnings report on the 28th (Thursday). I expect that they will reiterate that the quarter is on track, that orders have picked up enough to offset dropping deferred revenue from SAB101, and that they are still looking for the recovery to pick up by the end of the year.

...Nibble time has begun...

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To: Cary Salsberg who wrote (60900)2/22/2002 2:47:38 PM
From: Jacob Snyder
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Sorry I wasn't clear. Those two opinions are different time frames.

On a time frame of weeks to a few months, I am bullish. I think this current dip (6 weeks old) doesn't take out the 10/01 lows. Then, IMO, we will go on, and sometime this summer, take out the January 2002 high (Nas 2100). I am using margin now, following my policy of buy-the-dip/sell-the-rally. I'm guessing we're now close enough to the bottom of this intermediate-term dip, to be safely using margin. I will get off margin quickly, in the following rebound,as I did last October.

On a longer time frame (many months to a few years), I think we have not seen capitulation in the telecom/internet sector, including their equip suppliers. Notice, this opinion is not a market call. It's specifically about telecom/internet (a large sector, but not the whole market). To a certain extent, we are already seeing this. WCOM has recently taken out its 2001 low, while the Nas and S&P 500 are still well above those lows.

Am I being clear now?

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To: Sam Citron who wrote (60891)2/22/2002 3:08:45 PM
From: Paul V.
   of 70976
 
Sam, I missed Gilder. What did he have to say/

Paul

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To: Cary Salsberg who wrote (60900)2/22/2002 3:23:41 PM
From: Paul V.
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Cary, Jacob is being flexible, just like this market. :) At least he is not buying bonds, Bank, Precious metal, Riets, or savings in loans.<ggg>

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