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Strategies & Market Trends : Point and Figure Charting
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To: Paul V. who wrote (12872)1/21/1999 12:39:00 AM
From: Dennis J.  Read Replies (1) of 34811
 
Peak price for AMAT? Tough job Paul, but here is an idea.

Calculate price to free-cash-flow multiples for historical peaks and troughs, and plot these multiples on charts which also show long-term bond multiples (inverse of yields). The next peak should be at a correspondingly higher multiple to match with the expected bond multiple. Then throw in some judgement for the election cycle, impeachment proceedings, world affairs, to arrive at your final multiple line for AMAT. Measure this most recent multiple expansion from trough to the final peak, and take 80% of that expansion, and use it to calculate the final selling price.

Finally, deliver these final calculations to Jan ( or whatever her new name is), and do whatever she tells you to do. Very important not to ignore her ultimate recommendations.

Good luck.

Dennis
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