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To: BWAC who wrote (233)	4/16/2002 12:10:26 PM
From: Jacob Snyder	Respond to of 13403

TXN sold @ 34, entire position (9% of portfolio). These were shares I had bought at 29 and 30 in February. Placed limit buy orders, each 4% of portfolio, at 31 and every 1 point on down. Selling because: TA: this is the area where the last 2 intermediate-term rallies (in 11/01 and 3/02) stalled. I'm betting we don't yet break out of the horizontal channel. And it looks to me like the horizontal channel is now in a 27-35 range, rather than the 30-38 range we had been in previously. FA: assume EPS of $0.65 in calendar year 2003. Since they are at breakeven now, this is the rosy scenario, assuming a large increase in capacity utilization, sales, and margins, from current levels. It also assumes no recession. Then: 34/0.65 = a forward PE of 52. My expected PE range for TXN is 20-40, so a (very forward) PE of 52 is well above the top end of that range. Their GAAP EPS has been negative, each of the last 4 quarters. The forward 4 quarter's EPS is going to be maybe 0.20-0.25. I don't use forward or trailing 4 quarters, as these are trough numbers. But if I did, TXN would look even more overvalued. I was very encouraged by their 1Q02 results, and especially the guidance for 2Q02. Confirms my opinion, that the bottom is in, for the company and semis in general. But, valuations will still put a ceiling on this stock. The encouraging results mean I will raise my buy-back prices (starting buying at 31, rather than 29 or lower). Buy the rumour, sell the news. Buy low, sell high, repeat, repeat, repeat.