Semi Caps

<-- That stinker is a 10-year chart of the leading semiconductor equipment manufacturer, Applied Materials (AMAT). The company has almost no debt, lots of cash, both of which are attributes that I wish I possessed.

AMAT has gone through the arduous 2-step, multi-year transition from growth company to growth cyclical to plain old cyclical. Not fun and revenue has flattened out in the $8 - 10 billion range despite a blossoming solar business and lots of acquisitions along the way.

Morgan Stanley is recommending buying the group today, in an argument that is elegant in its simplicity. Spending by AMAT customers - the semiconductor manufacturers themselves - was down 28% in 2008 and is expected to be down 50% this year. You buy this group when business is bad and everybody knows it. I like this call.