Cary,
Excellent points. But many 'experts' doubt Microsoft's ability to
continue to grow at healthy rates, given their size, their market
shares, and the paradigm shift of the Internet. I believe they can
continue to grow. As far as AMAT is concerned, I agree with you
that the fundamentals are different, but I believe the market already
reflects those differences.
Indeed, I have far less invested in AMAT than with Intel and Microsoft.
But when you say 'there is no visibility for improved prospects' -
who is seeing no visibility? Short-term (6 months), I agree, but
longer-term, I certainly don't.
My main point is simply that short-term predictions are very difficult,
especially predicting tops or bottoms. I think at a current PE of 6,
and a PE of 15 compared to 97 earnings, AMAT is a
decent value, given its long term prospects. The fact that Microsoft
has a current PE of 36+ and Intel 20+ reflects the fundamental
differences you mentioned between those companies and AMAT.
Price/revenue ratios are even more skewed. If AMAT's stock had a
PE of 20, for example, given what I know, I certainly wouldn't
be buying.
Of course, I could be completely wrong about all of this! It will be
fun to watch over the next 12-18 months.
Ken |
