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

To: Mary Cluney who wrote (92853)	11/19/1999 5:44:00 AM
From: Amy J	Respond to of 186894

RE: "I'm not that good when it comes to mathematics, but off the top" Hi Mary, He needs to correct his GDP figure, which I asked if he could do. Amy J

To: Mary Cluney who wrote (92853)	11/19/1999 12:19:00 PM
From: Michael Bakunin	Respond to of 186894

It was my attempt to come up with an upper bound for valuation, or an upper bound for expected return, whichever you prefer. Despite Amy's compliments, the model is a childish what-if that assumes that any super-successful company eventually gets too big for rapid growth. I sought discussion; thanks for responding. Cheers, -mb

To: Mary Cluney who wrote (92853)	11/19/1999 11:30:00 PM
From: Bill Jackson	Respond to of 186894

Mary, Re: Models etc. The classical mature industry, like housing, cars etc reaches a point where it can only grow at the rate the entire economy grows, and as Intel approaches a 'car in every garage, and some with two" status with CPUs than it must fall to the growth level of a mature industry? Well this is partly correct as Intel in inventing new industries to enter as the older ones approach maturity(a mature industry assumes intense competition and no monopoly and buyers are fickel and mobile...that is why margins fall and growth reaches the same growth as the GNP...with no expansion). I doubt if Intel will ever reach the state where it is 5% of the GNP. 1/20th of the GNP($9 trillion) or every one spends 1/20th of their wages on Intel and the average is $36,000= $1800 annually for each man womand and child who make up the 250 million population base. I think we are quite a way from that point and that means intel is quite a way from 1/20 GNP. Right now at 30 Billion versus 9 Trillion it is 1/300th the size of the GNP or about $120 annually for every man woman and child in the USA. Of course more than 50% of those sales are in other countries and I do not know the actual ratio, so it is less than $60 per MWC. Still the average household of 4 with $240 going to Intel for CPUs, flash parts in TVs, cellphones and their share of web servers etc sounds in line with reality. Even with a growth rate of 20% annualy and the GNP at 4% this 16% overhauling rate will see intel reach 1/150 of NPG(doubling) in about 5 years,.. if they keep that rate of growth. I expect that some plateauing will occur as some aspects of their business decline to the average GNP growth rate and they will also run out of growth candidates as new operations will start from zero(unless they buy up someone who is big already) and so the large nascent ratios will be diluted by the large size that Intel has reached. In addition, rot may set in. Look at Phillips, Olivetti, Bull....all of whom were large and then rot set in. True they were in Europe and the governments there are pro-rot as they wrongly think that socialist policies are correct when they are suicidal in a competitive capitalist market. Intel may be immune to rot???....not likely...but it will suffer it from time to time and will cut it out..at a cost in growth terms. Bill