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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (36128)	7/28/2000 6:09:48 PM
From: Jacob Snyder	Respond to of 70976

Thanks, Cary: re: "Price/Sales is much less important when there are earnings". In a cyclical like AMAT, P/S is always an important variable to watch. At cycle tops and bottoms, EPS and PE ratios will consistently give the wrong signals about valuations. In mid-cycle (such as now), EPS and PE are more usefull. The problem, of course, is deciding when we transition from mid-cycle to late-cycle. Margins for AMAT fluctuate wildly, depending on where we are in the cycle. It will be interesting, if semi oversupply coincides with the peak of the copper/300mm buildout. That will present a lot of difficult decisions for semi companies, if it happens. AMAT has now been going sideways for 3 months. In early 1999, it went sideways for 4 months, before resuming the uptrend. Otherwise, the stock hit new highs almost every month in this upcycle.