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

To: Sarmad Y. Hermiz who wrote (11010)	8/16/2003 6:59:51 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 95738

Sarmad, there is no connection between AMAT stock price and its ability to do its business. Cannot really say I agree with you here in the least.....chart AMAT's stock price and compare it to their cash levels from '98 until the present. They went from $1.4B(??) in cash to $5.23B during one of the worst times ever for the sector......question 1: what will happen once the sector turns and they can really generate cash from a renewed upcycle? question 2: don't you think that their ability to not only survive but to prosper during utterly miserable market conditions warrants some premium? Please note that their PSR is only slightly above KO's using awful revenue numbers!!!! question 3: don't you think that their ability to survive the storm so strong puts them in a much stronger position for the next upturn as those who are still alive are probably not in as good a condition as they are? I simply cannot believe that YOU believe that: there is no connection between AMAT's business (and business results) and the price of AMAT stock.....IMO, this statement is ludicrous. Brian

To: Sarmad Y. Hermiz who wrote (11010)	8/16/2003 1:58:26 PM
From: Donald Wennerstrom	Respond to of 95738

Sarmad, as usual you have a lot of good things to say and I really appreciate your input. I won't try to answer you "point by point", but I will try to make a few observations/comments. <To say it in converse, there is no connection between AMAT's business (and business results) and the price of AMAT stock.> You won't get any argument from me there, but we all know that statement is true. If there was correlation, we would all be rich. It would be easy to invest in the market. We would wait for business conditions to be favorable, then we would invest in AMAT and while revenue increased, the stock price would increase - we could sell at the peak as revenue peaked and then buy at the bottom when business turned around again and repeat the cycle. It wouldn't take us very long until we could be another Warran Buffett! <So the key for the person who wants to make money on stocks is to anticipate the recommendations of the analysts.> That is certainly helpful, because over time, they do have a lot of influence. At the moment, buy recommendations are increasing and target prices are being raised. <So now stocks are going up on the expectation of increased revenue, unrelated to any profits.> This is very true(now stocks are going up on the expectation of increased revenue) - usually however, with a few exceptions, increased revenue means increased profits. As a matter of fact, with rising revenue, profit usually rises at a faster rate than revenue for a time. Anyway Sarmad, we have known most of these issues we discuss for a long time. The stock market is a game where we play for high stakes. We try to get an edge and make some money. As you point out, and I agree with you, there is little correlation between company performance over the "short term" and the stock price. I believe there is correlation however, over stock price and performance over the "longer term". That fact is shown very clearly in the tables that I have posted from time to time comparing stock prices now compared to several years ago. Over some period of time, a company must be able to show rising revenue and profits to grow and stay viable as an entity. Those that can't, of course disappear. <AMAT at 20 or 50 has equal disconnect from the results of Applied this quarter.> I certainly agree. Don