INTC Message Board - Msg: 1733989

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Technology Stocks : INTC

INTC 35.53

-1.1%

Nov 14 9:30 AM EST

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To: Jules B. Garfunkel who wrote (551)	7/10/1997 1:12:00 AM
From: greenspirit	of 990

Jules, I agree, it looks like the market is starting to realize long term value again and not short term news events. Jules, you've played this game so much longer than I and know so much more about the dynamics of the market, I was wondering if you could elaborate on a question which kinda nags at me. (it may appear a bit ignorant at first but please bear with me) The market always seems to focus on earnings increasing. why? Take Intel for instance. Their profits are nearly 6 billion dollars a year. Just for discussion sake. Let's say Intel reaches a point where their earnings are no longer increasing. But are still making steady profits of 6 billion dollars a year. Isn't the company getting more and more valuable? And shouldn't the stock? This is one reason I couldn't understand 1994 with regards to what happened to Intel's stock. Everyone just kept saying. Earnings are not increasing. Earnings are not increasing. Yet their profits were extraordinary. Am I way out to lunch to suggest that the real worry point to a company such as Intel is when they are no longer making a profit? This situation looks like it's way, way, down the road. I could be out to lunch here too but...I believe this is one of the main reasons you see Coke selling at such hi multiple's. The market seems to realize that hey, Coke is not going to grow 50% per year. But they probably are never going to lose any money. That still means the company is getting wealthier and wealthier. If the street ever comes to the conclusion that Intel is probably not going to lose any money for at least a decade. Which I think is likely. I believe the stock could see very high multiple's. Your thoughts appreciated. Regards, Michael

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