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

To: John Trader who wrote (43005)	3/4/2001 10:03:54 AM
From: michael97123	Read Replies (1) \| Respond to of 70976

From the wcom thread: To:Yogi who wrote (8556) From: el paradisio Friday, Mar 2, 2001 7:37 PM View Replies (1) \| Respond to of 8558 Very interesting development on the market.... NYA holding support at 626 INDU trading range, holding support at 10,450 SPX holding horizontal support from the end of 1999 TRAN inverted H&S on weekly chart NDX holding support from Jan 1999 BKX Inverted H&S on weekly...still bullish RUT holding support at 475 XTC holding support from the beginning of 1999 with bullish divergences ...MACD and ADX SOX looks good...coming to the resistance at 600 NWX....buy signal I have buy signal on WCOM, CSCO, EMC and many others.... It looks,Nasdaq recovery next week may come from the networking sector

To: John Trader who wrote (43005)	3/4/2001 4:43:04 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

re: valuations on techs: 1. First, don't use PE to value AMAT. It is a deep cyclical, their earnings often peak at around the time the stocks are troughing, and vice versa, and this distorts PE ratios. If you want to use PEs, you must use multi-year smoothed averages, which correct for the wild swings in earnings caused by the cycles. P/S is my preferred metric for AMAT. At a P/S currently of about 4.5, they are not anywhere near where any previous cycle has troughed (at 0.9-2.2). In fact, up until the last cycle peak in 2000, a P/S of 4.5 is higher than any previous peak cycle valuation. 2. You have to be very careful, trying to calculate PEGs today. There is an immense amount of debt, especially to dotcoms and telcos, which is going to have to be written off, and we are just begiining to see the accounting for this. Just beginning. It won't take us as long as the Japanese are taking (they still have a mountain of debt on corporate books, that has been uncollectable for a decade). But we are going to see a wave of "special charges" for uncollectible debts, and it is going to have a significant effect on balance sheets and income statements. In addition, there has been an immense amount of Creative Accounting going on. It defies reason, that companies like GE and CSCO were able to beat earnings expectations, by exacly one penny, every quarter for years and years. To put it bluntly, they made the numbers fit the expectations, and deferred a huge amount of expenses into the future. AMAT, I think, has done a lot less of this than the telco-equips. I expect to see a lot of restated earnings from past years. 3. Lastly, forward EPS estimates have been plunging lately. And, unless we get that sharp V-downturn, those EPS expectations are going to continue to come down.

To: John Trader who wrote (43005)	3/4/2001 5:33:03 PM
From: Gottfried	Read Replies (1) \| Respond to of 70976

John, you said >I like to use the PEG ratio, using forward PE, and the 5 year estimated growth rate to get a feel for value in stocks.< It can't hurt to get a feel this way, but it is not very useful for cyclical stocks - as Jacob has already commented. Besides, 5 year earnings projections cannot be very accurate AND the market clearly does not price the stock based on them. If it did, the price would not be cyclical. I prefer a very simple minded method where I determine what semi equipment orders [the main driver for stock price] are doing. They are declining. Price SHOULD decline with them, as in the past, but may not because of institutions jumping the gun. Then, even more simple minded, I draw a straight line on a 10 year price chart, connecting the cyclical price lows. This establishes a downside potential. I already know that as in the past the stocks should eventually appreciate 300% or more from there, unless the cycle gets flattened this time. We've been promised this flattening before and it hasn't happened. I think it's safest to assume a V shaped cycle for orders and price, simply because we've seen it since Jan '95. All of the above I combine with staring at the price chart, which is called voodoo by some, paying attention to volume and to daily and weekly trends when they appear. My short answer could have been: I take Applied's ability to thrive and grow market share as orders turn for granted. I just try to get a good entry price from the chart. Gottfried