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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Big Bucks who wrote (7667)	10/22/2003 12:36:59 PM
From: chomolungma	Read Replies (1) \| Respond to of 25522

Comptetition, market share, and pricing affect margins.... BB Of course they do, but the conclusion that Citigroup's margins, or the banking industry as a whole, are too high is silly. For starters, don't use return on sales as a tool. It varies widely across industries (which was what I was pointing out as the critical error in this analysis). If you must use a yardstick, use return on invested capital. If a banker can earn outrageous returns on capital then it's going to attract lots of money into the banking industry, right? And then what happens? Like clockwork, returns drop. Yes, even competitive industries and industries producing commodities earn large returns from time to time. Look what MU earned in the last shortage period. Anyone wish to argue that DRAMs aren't commodities?