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

To: Cary Salsberg who wrote (36788)	8/15/2000 12:13:48 PM
From: y2kate	Read Replies (2) \| Respond to of 70976

Can someone tell me who are AMAT's major competitors? <eom>

To: Cary Salsberg who wrote (36788)	8/15/2000 12:22:31 PM
From: mitch-c	Read Replies (2) \| Respond to of 70976

Yes, but loosely. They are some of many inputs into the decision process. I think psychology and perception has a lot more to do with the ultimate pricing. The difference between a PE of 20 and a PE of 40 is more an aggregate judgement call on the part of investors than a numerically determined given. We saw that proved with the dot-com craze. The crash came from investors reevaluating the companies' potential. There are certainly central tendencies, but also excursions from the center. That's why I referred to a carpet plot (aka a tic-tac-toe plot) to get a handle on the uncertainty level. You can build one (I haven't) by taking each factor you think enters into pricing and plotting best/worst/expected cases for each one. Connect the dots, and you've probably (3-sigma or so) encircled the ultimate numerically justified high. Example of best case: Revenues - Morgan's prediction - $20b. Earnings based on $20b and historical best EPS%. P/E - historical max - 45 or so. Cycle end - 2003. However, as I've repeated - and will again - just because the numbers show something should happen doesn't force it to happen. The individuals who make up the market can suspend their disbelief as easily as they did their belief last week. It sounds a bit Heisenberg-ish, but the peak price will be defined when it happens. Until then, we're all guessing. - Mitch