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Technology Stocks : Intel Corporation (INTC)

INTC 34.17

-2.7%

1:51 PM EST

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To: Jay who wrote (54549)	4/27/1998 12:13:00 PM
From: Mary Cluney	Read Replies (4) of 186894

Jay,>>>I believe the whiz kids on Wall Street expect the ratio of PE to profit growth rate to be close to 1.0<<< Suppose in the worst case, Intel stops growing. Merced has no impact on growth - and Intel manages to remain a $25B company maintaining 50% gross margins as management promises - you mean to tell me that Intel would then be worthless? Now look at Chrysler - they are the third largest automobile manufacturer in the United States and who knows where they rank in the world. They don't own any technology that's worth mentioning. They have competition not only from Western Europe and Japan - but also from Korea, Malaysia, Thailand, Indonesia, and Taiwan - and maybe soon from Brazil, Mexico and Eastern Europe. The automobile market can grow only so much without reeaching environmental and infrasturctural limits. Yet Chrysler sells at a P/E near 10. I don't pretend to know at what level P/E Intel should be selling at - but when you do any kind of comparison - Intel P/E seems extraordinarily low. However, people with a vested interest in keeping Intel prices low will frequently cite historical P/E values to scare investors and keep Intel prices down. They rarely get into Intel Technology, Intel dominance in it's market, and the future of that technology going forward beyond 2 Qtrs. I want to make it clear that I do not believe in any Oliver Stone type conspiracy. I am only complaining about human psychology as such - behaving like lemmings or like sharks when they smell blood. People like Tom Kurlak take advantage of these traits and after poking around and drawing blood - watch the sharks gather and then every so often draw some more blood at opportune moments. In fact, I don't believe Tom Kurlak has anything against Intel and he is not consciously campaigning to keep Intel prices down. He has put himself into a position where he can "MOVE" Intel - often to his personal benefit - and it is only coincidental that he has had a chilling effect on Intel prices over an extended period of time. It's like throwing out the baby with the bath water when you are getting paid to wash the bath tub - and no one is complaining. Mary

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