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

To: Jacob Snyder who wrote (40291)	12/1/2000 10:28:31 PM
From: Proud_Infidel	Respond to of 70976

Jacob, Re: If you intend on holding the stock for >5 years, then you should be willing to pay the same PE for the same growth rate (=equal PEGs). Therefore, you'd do best to buy the less predictable stock (when it is out of favor), because you can buy that stock cheaper (=at a lower PE, paying less per $ of future earnings). But most investors (especially institutional investors) don't hold that long If indeed current stock prices reflect the discounted present value of all future income streams and there really is such a thing as Market Efficiency, then this should not only be a theory but we should not see the wide divergence in multiples attached to many of these stocks when compared with AMAT, at least to the degree to which they currently exist. That was my only point; namely, that market efficiency is once again called into question because of this inconsistency. BK