Formerly About Applied Materials Message Board

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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: Stephen Swantz who wrote (8020)	9/17/1997 10:32:00 PM
From: Tito L. Nisperos Jr.	of 70976

Stephen, the formula using Earnings times Expected Annual Growth Rate should give a better result in a Bull Market than that using the usual PE (price divided by the PRESENT Earnings/share for the PAST 4 quarters). That is because of the introduction of EXPECTED---a thing for the FUTURE (we invest for the FUTURE Price, not for the PAST or not even for the PRESENT Price)...The last time I used PEs, was when I shorted INTC a few years ago at 60 (because I thought the stock that usually sport a PE of 18 was over-priced at the PE of 22) and have to cover at 90, after realizing something wrong is happening---not to the stock but to me! Actually, every method of investing works---in some way. The PE advocate who bought AMAT at 30 and sold at 40 (as the stock reached the 5 year average PE of 20) did a Good Investment Job, although not better than the PE advocate who is still holding his investment as he revises his expectations from one year to several years to take care of the rising PE of AMAT...As for me, my target of 250% gain for 1997 and 100% gain for 1998 ( target prices of 126 and 252 respectively, from 36) was figured out using the Gains (for two consecutive years) attained by AMAT in the late 70s...I just wanted to Re-Live those magical years when, as a neophyte who did not know about PEs and Charts before, I happened to do very well in every stock in Silicon Valley I invested on!...

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