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

To: michael97123 who wrote (45714)	4/21/2001 5:46:20 PM
From: Cary Salsberg	Respond to of 70976

RE: "In any case, at some point in the future quality co's like amat will be significantly higher than they are now." Investing is not magic. It only seems so when the inmates are in control of the asylum. As has been pointed out a few posts ago, AMAT management is aiming for $20B sales in 2005. A P/S ratio of 6 gives a $120B market capitalization. Based on Yahoo's current capitalization figure at yesterday's price, that gives a future price of $148. Since AMAT achieves about a 20% after tax profit on revenue, a P/S of 6 corresponds to a PE of 30. If the PE is 20, the 1996 cycle's multiple of the peak earnings, the future high is $99. There you have it. A reasonable estimate of AMAT's high between now and 2005 is $100-150. Is this "significantly" higher? It looks like AMAT could detour toward $5B on the way. A P/S of 6 on $5-7B gives $30-42B, and a price range of $37-52, but I expect a bottom P/S in excess of 3 and a range in excess of $18-26.

To: michael97123 who wrote (45714)	4/21/2001 6:00:02 PM
From: Cary Salsberg	Respond to of 70976

RE: "But I would think you would be upset if you didnt get back in or got back in at higher prices." As I said in a previous post, I am aiming for 45% cash in my brokerage accounts after I sell this run up. I have reached 40%. I will try to redeploy this money at lower prices. I have almost established buy levels, and I will post these if and when they again become relevant. I will not be as happy as I might if I fail to redeploy, but I have enough to enjoy any big move. For reference, at Friday's close, the value of the stock in my brokerage account was ~97% of my invested cash and 133% of my stock value at the bottom in 1998. My goal is to reach 164% and 225%, respectively.