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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (92849)	11/19/1999 4:28:00 AM
From: Mary Cluney	Read Replies (3) \| Respond to of 186894

Amy, >>>It appears you are highly skilled in mathematical modeling, and sometimes smart people get laughed at for intelligent comments which challenge the status quo.<<< I'm not that good when it comes to mathematics, but off the top of my little head, when Intel reaches 5% of GDP, and assuming GDP has some growth, GDP may be in the neighborhood of $20T. At 5%, Intel revenues will be $1T and assuming 5% growth - Intel is growing at $50B annually. I'm not laughing, but what was the point about this model? Mary

To: Amy J who wrote (92849)	11/19/1999 12:10:00 PM
From: Michael Bakunin	Read Replies (2) \| Respond to of 186894

Thanks for the kind words, but my thought experiment is back-of-the-enevlope at best. Plug into a spreadsheet the last four-quarter numbers for earnings ($7B), revenues ($29B), GDP ($9276B), then set up a two-stage growth period with whatever limits you like. To discount, I assumed a dividend payout continuing at 5% of earnings during the high-growth period, and payout of 50% thereafter. My GDP plug was accurate; cf stls.frb.org. Under the optimistic assumptions (20% growth 'til INTC revenues = 5% of GDP), the discount rate implied in today's price is 11.7%. -mb