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In April, under the Tencor thread, I predicted that the semi
equipment stocks would test their January and March lows.
I was merely looking at a TREND since last summer and acknowleging
that the street had a STORY, i.e. semi equips are cyclical and the
boom cycle is ending.
Today's Lam announcement, AMAT's a few week ago, Merril Lynch's new
neutral ratings, and company warnings, in general, in the quarterly
reports have pushed many close to January and March price levels.
I would love to buy about 10 of these companies, right now, but the
TREND and STORY (see above) scare me.
If the negative scenario is played out, semi-equips will report
significant decreases in sales and earnings and in some cases zero
earnings or losses.
I believe the semi-equips will move lower from here in anticipation
of the negative scenario, but I believe nobody knows how extreme the
end of the boom cycle will be.
This will create a GREAT long term (3-5 years; 3-10 times your money)
buying opportunity. I will buy the good leading edge semi-equips
when I can pay no more than 2 times cash and 1.5 times book!
I am interested in critical comments based on empirical data!
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