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

To: The Vinman who wrote (18940)	4/22/1998 1:39:00 PM
From: derek cao	Respond to of 70976

A good article on valuation from cymer thread: Message 4160130 derek

To: The Vinman who wrote (18940)	4/22/1998 1:40:00 PM
From: Joe Sabatini	Read Replies (1) \| Respond to of 70976

>>If the S&P gets to a PE of 35 to 40, which it never will... At the end of December, would you have guessed the NASDAQ would be over 1900 now? Because of low interest rates and the lack of other places to put money, there is a feeding frenzy going on. Upgrades are being given out based on extremely thin reasoning, ignorant of important economic events and trends. I think the average PE on the S&P will at least approach 35, and companies like Microsoft will be trading at over 100 PE next year. Think about it. Microsoft stock is going up despite the fact that they will grow at most 20-25% this year. They are one of the annointed ones. Everyone loves Microsoft and expects at least 50% return per year out of them. New investors are piling in. We can see that their stock price will continue to far outstrip their actual growth rate. The same will happen for companies like Intel (30 PE this year), Cisco (80-90 PE this year), etc... Crazy stuff, but this is what will happen. Joe S.