Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 148.32

-3.3%

Nov 14 9:30 AM EST

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To: Justa Werkenstiff who wrote (5996)	6/25/1998 4:43:00 AM
From: Jacob Snyder	Read Replies (2) of 10921

Justa: thanks for the article: well written, consistent. If you chew it up thoroughly, it becomes bear food. About his market predictions: Here's how I chew up his numbers: His (repeatedly revised downward) EPS for the S&P for 98 and 99 are 47$ and 51$. His (again, repeatedly revised downward) EPS growth rate is 6%/year over this 2-year period. He thinks the S&P will end 1998 at 1200. This gives a trailing PE of 25.5, and a forward PE of 23. The PEG (using trailing earnings) is 4.25; the PEG (using forward earnings) is 3.83. What is his justification for that absurdly high PEG? Yes, we know inflation is low (but wages are rising faster than price inflation, for the first time in a generation). What else? A PEG of 4 on any stock is a sell signal, right? And his prediction of a Fed Funds rate cut in 1998 is pure wishfull thinking. The only way that could happen is if rising unemployment eliminates any threat of wage (and then price) inflation, and the U.S. economy stops growing. Noone sees that happening in 1998.

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