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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: The Freep who wrote (78093)	6/6/2001 2:45:37 PM
From: Alex MG	Respond to of 99985

>>>The stock's PE will go from a modest 24ish to 34ish, the stock might have to wait awhile to catch up to the fundamentals<<< Of course you realize the market is not interested in fundamentals at this time... It's a new bull market, forget silly things such as p/e ratios... <gg>

To: The Freep who wrote (78093)	6/6/2001 3:06:16 PM
From: t2	Respond to of 99985

I don't know what the message is, exactly, though today's movement implies people think this quarter will be okay vis-a-vis estimates. But let's say Intel does do the 13 cents they are estimated to do. Let's say the stock stays at 30. The stock's PE will go from a modest 24ish to 34ish, cuz the 13 cent quarter compares to the 45 cents they did LAST YEAR. In fact, for the next two quarters at least, the company will make less than the year before, so the PE will keep going up, not down, even if the stock remains in the same spot. Freep, the truth I don't really know. I had not liked this stock for a while. I prefer to buy the one that benefits from low PC prices and price cuts in components/computers...being Microsoft. I just warmed up to it in the last few days. The possibility is that PC demand picks up more than what people expect on the WindowsXP launch which is being put at the same level as the big launch of Windows95. What I recall is that ahead of significant launches, the PC buying drops off quite a bit...but that means there is a big surge in demand afterwards...making the forward PE very good and setting up for some positive earnings suprises. Investors like positive earnings surprises. In the meantime, investors seem to be betting that the downside near term is minimal. Even if there is no real economic improvements on a larger scale, the bet is that PC demand picks up anyways thanks to Microsoft..again minimizing downside risk. Freep, Of course I don't really know how it works out in the end but that is my sense of why investors are buying Intel and tech in general. PC tech looks a lot better than telecom equipment on a fundamental basis so we get a little more buying here. The buyers are not playing the near term earnings expectations, imho--maybe not even next quarter. BTW--just hearing on the HWP conference this moment that Windows XP should increase unit volume quite a bit in PCs, just like it did with Windows95 and Windows98. They mentioned that it lasts for many months afterwards. The other point is just thought of -- is that there had been little need to upgrade at the corporate level; now with Windows XP and Office XP, this may increase the upgrade levels. Again, leading to the belief that demand should pick up significantly starting year end. That seems to be the logical reason for buying up Intel now....no debt and lots of cash is a good thing too. On that last note...I think I will buy some more Intel over the coming days. <g> This seems to be the key (upgrade cycle on corporate desktops)...it just hit me after I had finished typing up my response to you. ...all thanks to MSFT as usual.

To: The Freep who wrote (78093)	6/6/2001 5:32:51 PM
From: t2	Read Replies (1) \| Respond to of 99985

Freep, This story (below)basically confirms what I noted about PC upgrade cycle. So many semiconductor companies have noted that the PC sector is the key for them. I have heard this time and time again on many conference calls of key semis. Communication chip sector (optical etc..), which is related to telco is a small piece of the pie...so a weak telco equipment sector may not hurt the industry as much. The corporations will just be forced to spend to upgrade. Who knows how it ultimately plays out...but at this time the thinking is that there will be a PC recovery even if the economy is not as strong as many expect. IMHO, it would be a mistake to underestimate the significance of this launch to chips and boxmakers. That is why buying the sector...maybe not the entire sector but the PC focussed stocks like Intel, Dell and MSFT. Who knows what happens to demand for big Unix servers and I am not willing to bet on that. However, the Windows XP is going to be huge, whether corporations like it or not. Of course this could mean a weak September quarter along the way....I believe investors will look beyond June and September. Read this story and see if it convinces you. I am interested in your opinion. thanks. dailynews.yahoo.com BTW--one comment on mutual fund behavior. Last year, many of the tech funds had shifted from PC to networkers/communication chips/optical as the key holdings and had reduced exposure to PCs. That is why it is even possible to have many technology funds underweighted PC related stocks. That could be why telecom equipment related stocks remain underperformers and may continue to in the near term. Recovery for that group seems much further down the road.