Applied Materials No-Politics Thread (AMAT) Message Board

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Technology Stocks : Applied Materials No-Politics Thread (AMAT)

AMAT 252.25

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Nov 28 9:30 AM EST

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To: Steve Lee who wrote (3765)	10/27/2002 9:46:36 AM
From: Kirk ©	Read Replies (1) of 25522

What is the cost in setting up as a competitor to PSFT? Tech salaries are low and there are plenty of very large tech companies with tons of cash in the bank and many underutilized employees. Well, that explains why I didn't buy internet stocks (other than the one I worked at) on the way up nor have I bought software companies as this question has always bothered me. I do own MSFT at a cost basis of $4+ a share and I sold 25% of my holdings after I got an 8x gain so I already made 2.5x my money and the rest is just there because I think MSFT is sandbagging it now that they are under attack from the DOJ. I think they could easily double their earnings once they start to monetize their internet holdings... but why look too strong when the DOJ is after them? I dont expect the S&P or NDX or Nas comp to make new highs in the next five years, and I do expect them all to be lower five years from now. I really don't know. I doubt they will hit new highs any time soon as the highs were like an open loop over shoot in a linear system… Short and sharp and not an issue for most of us unless you were adding money to tech rather than using asset allocation to take profits and lower exposure as MANY of us here were. I look more at the long term growth trend lines. Get a plot of the total NASDAQ Composite back to 1980 and connect the lows and see it hits about 1050 stockcharts.com[h,a]dhclyymy[d19700601,20021231][pc20,50!d20,2!f][pc20!c50!i!d20,2!b100!b200!f][vc60][iut!Uo14!La12,26,9!Lh14,3!Lc20] Now connect the average on that chart and it hits about 2000-3000. I felt this was about the point one could look to start DCA'ing back into the NASDAQ stocks but we have overshot by more than 50% the growth trend. This is pretty typical and is why I started my DCA program slowly and still maintain a large cash reserve compared to what I had at the 1998 bottom… as we could go even lower But key is we overshot by 2x on the upside and so a factor of 2 undershoot would be about 1000 which just happens to line up well with the trend line connecting the lows. As to earnings, or lack of earnings, how many times do you think JDSU or Lucent can write off $40B? They don't have that sort of market cap to write off so the losses have to get smaller by default.

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