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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (11009)	8/16/2003 2:15:13 AM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 95738

>> In AMAT's case you have to say that over the years they have been the most successful in following this process, because they are far and away the biggest semi-equip company in the market place. Wonderful for Applied and its employees. Whether at this time AMAT stock was 20c or $20 / share is all the same to developing products and advancing technology. To say it in a different way, there is no connection between AMAT stock price and its ability to do its business. To say it in converse, there is no connection between AMAT's business (and business results) and the price of AMAT stock. And the tables that you publish, and the charts that Gottfried plots all confirm this. There is no connection. Neither does the AMAT stock price influence the business results of Applied. Nor does the business results of Applied correlate with the past, present of subsequent price of AMAT stock. But of course there is a slight connection. Wall street analysts have demonstrated an ability to cause the stock price to increase by influencing fund managers (spending other people's money) to spend that money on stocks that analysts recommend. So the key for the person who wants to make money on stocks is to anticipate the recommendations of the analysts. It used to be the recommendation of analysts was earned by increasing profits. But currently that is too hard. If Wall street had to live on a slice of profits, they'd starve. So they want a larger pie from which to take a slice. And "revenue" is that larger, and conveniently easier, pie. But still, increased revenue has been hard to come by. So now what to do. Baby still needs new shoes. The kids college tuition looms ahead. Must find another hook to lure in buyers. OK. Got it. Let's focus on the prospects of increased revenue. Analysts will recommend stocks of companies that show a possibility of increasing revenue. Even though this revenue does not result in any income to the stock holder, or to the company. And sometimes wasn't even actual revenue. So now stocks are going up on the expectation of increased revenue, unrelated to any profits. So the circle is now closed. Stock prices are not related to the performance of the business they represent since that is too dismal. So they are related to the story that is told about their future. And who can dispute anyone's version of the future ? Therefor you cannot dispute any stock's price. AMAT at 20 or 50 has equal disconnect from the results of Applied this quarter. But I'm sure none of this is new. Sarmad