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

To: Gottfried who wrote (41066)	12/22/2000 3:08:12 AM
From: Robert O	Read Replies (2) \| Respond to of 70976

Did you start this G, Fascinating subject, this idea of value lost and won. I think Ian is closest to getting at the concept of where all that 'value' disappears (and reappears!) from. Take AMAT (really, take it please!) ... 811 mil. shares outstanding. Figure avg. volume 18 million shares. That's only about 2 1/4 % of all the possible ownership pool getting their 'vote' in and affecting AMAT's TOTAL Market Cap. And really it's only the net affect of the 2.25% since buyers and sellers at the same price (maybe just different times during the day) effectively cancel each other out. In any event a tiny voice determines the marginal price a buyer or seller interesting in joining our 'Family' (Manson's is seeming saner at this point) of AMAT owners. Is the price they set appropriate to value the rest of the shares held...ALL 97 3/4% of them? Well, yes if a run on the AMAT bank did not create a liquidity crisis and we could all get out in a nice orderly fashion. Sometimes this almost happens e.g. buyout at predetermined price. But the reality is a tiny % of the total owners of this fine fine publicly traded company are 'determining' current price. In the long haul, Peter Lynch is right and market Cap should approximate true value. I'd say this is particularly true in light of this discussion in that the shares have been 'churned' over time and you get a good representation of holders feelings about value. 45 trading days gives you a 100% churn. Unfortunately, unlike exit polls which try to take a good cross mix of voters to extrapolate from small sample sets to full universe, traders may not be good proxies for the much larger general stakeholders not trading. In fact it might be argued majority of traders are skewed toward those seeking liquidity and therefore a sell bias. So, the value is never really ALL there or ALL lost. It's mostly 'unrealized' for the stakeholders in a public traded company. The proof is almost in the pudding in that mania highs and panic bottoms point to the idea of what would happen in a 'run on the bank.' What if many more stakeholders than usual wanted to turn their notional value into to real value. We are now having a, perhaps apropos for the holidays, 'It's a Wonderful Life' run on AMAT and it's going to take a giant sized Jimmy Stewart, perhaps tethered to that perky Maria person on the trading floor, to assuage shareholder's fears and stem the selling so that the marginal value doesn’t continue to fall well below 'true' value (true value of course being the simple formula of net present value of future cash flows... what was that figure again for AMAT?). RO

To: Gottfried who wrote (41066)	12/22/2000 7:42:12 AM
From: Jerome	Read Replies (1) \| Respond to of 70976

Some ideas for making real money Part one: No matter where my money took off for (money heaven, purgatory, brokers pockets, or vaporization) I need to replace it so myself , my horses and mules can live the lifestyle we are accustomed to. Its been my observation that two stocks AMAT and NVLS about every 14 months trade at exactly the same price. This last happened pre-split for NVLS.(this is a very short term trend) If this happens again in the near term my idea would be to divide the number of AMAT and NVLS shares equally. Here is why I will be doing this. (decrease NVLS and buy AMAT... decrease AMAT and buy NVLS) 1)Both NVLS and AMAT are top tier companies with excellent outlooks. 2) NVLS seems to be growing faster than AMAT and if the news wires are correct NVLS seems to have an edge in the the move to copper. 3) Currently NVLS is holding support at 30 better than AMAT is holding support at 40. 4) On any recent up day NVLS responds better than AMAT. 5) Because I intend to stay strictly in this sector I would rather ride two good horses (or mules) than one. 6) On any given day NVLS is a better call write than AMAT. It have been this way for the past two years. 7) If either one of these companies moves sharply ahead your portfolio will be out of purgatory. This might be heresy for the one stock investor (AMAT) and the buy and hold crowd of the thread, but if You as an investor stand around waiting things to happen, get a warm pair of boots because its cold out there, and spring is some time off. If someone has a better idea just call it part two. Jerome