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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (14464)	1/12/1998 2:59:00 PM
From: Gottfried	Respond to of 70976

Ian, good comeback to the Abelson article! thank you. GM <eom>

To: Ian@SI who wrote (14464)	1/12/1998 3:42:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Re:equities are at or approaching their lows for P/Es, PSRs, P/Book, etc; Ian, This market is one of polar extremes. On the one side we have many of the large multinationals trading above their historic p/e, p/b, psr etc. Names such as KO or G or DIS which nobody can get enough of. On the other side we have the "risky", "volatile" technology group, and specifically equipment group, trading at historic lows as you pointed out. IMVHO, the "ship" could likely sink certain stocks(KO), though probably we'll just see a sideways pattern for some time until their fundamentals catch up with valuations. But at this point, I believe the upside potential is much greater than the downside risk for the equipment group. Last week Lam's eps for FY99 was chopped in half by one firm and today the stock was up 2 1/2 points and one point in the day. I see that as meaning most, if not all of the bad news has been factored in. Soon the pendulum will swing the other way once the big $$ realizes that a stock with 20% eps growth trading at a PSR of 1 or trading below BV does not make too much fundamental sense. There is a vacuum that needs ot be filled in terms of valuation with the equipment group. Even assuming a FY98 eps of $1.69(its low forecast at this point), AMAT should not be trading in the 20's. Just my .02 Regards, Brian BTW, if inflation remains nonexistent, we see no signs of significant deflation and we see rates drop into the 5-5.5% range, all of these portend excellent stock prices assuming their is some certainty regarding SEA.