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To: Eric K. who wrote (5066)	8/15/2000 1:34:15 AM
From: eplace	Respond to of 275872

Eric K....re:Applying a conservative price/earnings ratio of 103, that means Intel should be worth $160B * 103 = ~$16 trillion in 2010. Given this, and my genius for investing in Intel, I will be rich in 2010. And that's great, because I really deserve it for my superior understanding of Intel's visionary strategies. -A very serious Eric Uh, Eric, are you from the Rambus thread by any chance? Ed P.

To: Eric K. who wrote (5066)	8/15/2000 11:54:16 AM
From: TimF	Respond to of 275872

I do not think that 5+billion people will become first time computer owners over the next 10 years. Eventually computers will probably penetrate the poorest countries of the world but it will take awile. Maybe in 30 years there could be 2 billion Intel CPU sales per year (the population will be larger), with lower costs to increase market penetration, lets say Intel makes $50 (of profit for each CPU. Thus you get $100bil in profits from CPUs, and lets add another $25bil in profit from all other sources (your $30 per person on the planet profit from web-hosting is one of the craziest estimates I have ever seen). Thus you have $125bil in profit in a mature industry (when most of the world is buying your product you can't increase your market too much). With a P/E of 20 that gives a market cap of $2.5trillion. That's over 5 times Intel's current market cap, but considering that its over 30 years way it 5x a great return? If you assume inflation of 3% per year then it is less then 2.5x after inflation. All of this does not consider any posible dilution of Intel's stock, or erosion of their market share. Ofcourse my numbers are pulled out of thin air but they could be lower as much as they could be higher. I think it is more likely to be accurate then your estimates. There is no way Intel sells an average of a billion CPUs a year for the next ten years, and it is unlikely that Intel's P/E will go up once CPUs become a mature industry that has penetrated almost all of its potential markets. Tim