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

To: Pink Minion who wrote (37488)	9/27/2000 9:57:18 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

holding AMAT till it hits a P/S of 1 (the 1996 low). I don't think it ever became that cheap It did for less than a two month span in July/August of '96. I was fortunate enough to pick up the bulk of my shares at this time. However, with incresing market share and profit margins, I don't see it going there anytime soon if ever. BK

To: Pink Minion who wrote (37488)	9/27/2000 12:43:01 PM
From: Jacob Snyder	Read Replies (4) \| Respond to of 70976

AMAT P/S range: 0.9 lo 1995 3.0 hi 1995 0.9 lo 1996 4.4 hi 1997 2.2 hi 1998 12.0 hi 2000 6.5 today As you can see, the P/S at the 2000 peak was far, far above the historical range. For cyclicals, P/S is a better indicator to follow than PE. PE will peak long after the stock does. If you wait for an earnings slowdown (even if you use 12M forward estimates), as your sell signal, you will miss the turn. Also, even with a near-50% haircut, we are still above the valuation at the 1995 and 1997 peaks. I believe the best way to predict the future is the consistent longterm patterns of the past. Those patterns suggest a downcycle trough P/S of 1-3 should be expected. Your understanding of the tax code is shaky, also. re: "nobody on this board thinks AMAT will EVER trade at a P/S of 2 again." Yes, that was precisely my point.