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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Tom Pulley who wrote (29070)	9/9/1999 4:04:00 PM
From: grok	Respond to of 93625

RE: <... if only we could predict what the PE will be in 2002. My guess is that RMBS will be able to project 25-35% growth beyond 2002. The dram market over the long term should continue to grow 15-20% and RMBS should be along for the ride.> The problem with the dram market is that it can go down faster than it goes up. I don't have time to look up the numbers now but, as I remember, the market was about $40B in 1995 and went as low as $13B last year and is expected to just get back to $40B by next year. This rollercoast stretches way back in time, too. I am unclear whether the market will give rmbs a skyhigh pe due to having huge profit margin and great Return on Invested Capital or a low pe due to it going up and down with the dram market. But I believe that it will also depend on near term events due to the psychology it will develop with fund managers and analysts. Cisco has a pe of 114 in part because of its great growth but also because it is so consistant and always hits its number and never surprises anyone. I am worried about how good Rambus is going to look during the Coppermine launch in October and the rest of this year. If it does poorly then the company and the technology may get a tarnished reputation and the number for the March quarter may get lowered and there could even be some downgrades. This would hurt the near term but may also effect the long term pe. This is why I sold on Tuesday. I may get back in later if Rambus can sail through the upcoming period OK.