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Politics : Formerly About Applied Materials

AMAT 322.51

+6.1%

Feb 6 9:30 AM EST

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To: Tito L. Nisperos Jr. who wrote (4368)	5/9/1997 8:56:00 PM
From: Paul V.	of 70976

Tito, Teri and other threaders. Those of us who follow the othe AMAT thread of techsock, "When the Blood ...." I communicate the following to Amir. Thought you may be interested. What are your thoughts? Paul "To: Amir Shalit (2064 ) From: Paul May 9 1997 8:44PM EST Reply #2094 of 2094 Amir, I understand your position based on AMAT'S declined fundamentals. When I was analyzing AMAT in September the EPS & fundamentals were good so why did Wall Street dump the stock. The explanation was the book to bill ratio which was the projection of future earnings. Result! Rapid decrease in price to the point where you and I bought AMAT. The lowest I believe was 22 in July/Aug.'96. Wall Street in Nov/Dec again looking 9-12 forward decided that AMAT was a winner even though the EPS was declining. In my opinion if compared against last years lows of 22 an the highs could be in July/Aug. '97. But I will not bet against AMAT. With the AMAT low EPS then why should the stock be so high? I agree with you on this point. Based on the latest earning using NAIC's database we are projecting a 3-5 yrs price of $82-104. Some individuals even using a high PE are projecting $149. The only explanation is Wall Streets view of AMAT in producing future earnings. Momentum buying has taken over with this prime stock. The present earnings do "suck" but potential buyers and brokers are looking at the potential and don't want to be left at the station when the train pulls out. This is why I use Point and Figure charting. It is pure economic 101 (supply and demand). Amir, you and other threaders may want to check "www.dorseywright.com" for information on Point and Figure charting. I have become a disciple since I have been following 225 stocks using it along with NAIC's data and the excellent dialogue with fellow threaders with good result. This method helped me catch AMAT. We are reminded "Do not fight the Market." What are your thoughts fellow threaders. Paul"

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