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

To: BWAC who wrote (11492)	9/8/2003 12:38:04 PM
From: The Ox	Respond to of 95611

OT bwac, If I might say that lately you are getting a little too rational about the market. Not that your point isn't valid. but the market has almost always been more of a popularity contest than an efficient valuation engine, at least for the past 30 or 40 years (that is, as long as I remember). That's why the old adage "buy low, sell high" or the reverse "sell high, buy low" rings true. When emotions run negative, the market does poorly. When they run high, the market does well. Look back through U.S. history and see what was happening in the country during the really tough markets (especially in the past 30 years) and you will see substantial degrees of political, economic and social instability. Vietnam+Watergate+race riots (72-74), S+L scandal-Insider trading scandals+USS Stark and other ME missile attacks, soaring bond yields (87), 2000 Election turmoil+WCOM/ENRON+9/11,Greenspan taking away the punchbowl. Also, these analysts and market commentators like to create articles in which they predict the future. But they haven't a clue as to where the cycle will peak or what the earning power of the better run companies will be at that stage. So they write reports or articles in which they try to justify a stock's move or some future price target they've just announced. You've followed the market long enough to know not to take these things seriously. Eliminate the noise, is my recommendation.

To: BWAC who wrote (11492)	9/8/2003 12:54:11 PM
From: Cary Salsberg	Respond to of 95611

RE: "stock can trade at 27x peak cycle earnings" 1. Historically, semi-equips traded at 20 x peak cycle earnings, so 27 x is plausible in a low interest rate environment. 2. 20 x peak cycle earnings occurred ~1 year before the actual peak earnings were posted, so the peak price probably was based on expectations that were higher than the peak earnings that were actually achieved. 3. If semi-equips are cyclical "growth" companies, then there will be higher peaks and troughs going forward, and book value will be higher at both. Some semi-equips are cyclical growth and some just cyclical. (A topic that should be one focus of discussion here.) 4. Earnings do matter, but we are at a place where there is much debate about many aspects of industry fundamentals.