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

To: jtechkid who wrote (19531)	5/17/1998 9:03:00 PM
From: Proud_Infidel	Read Replies (3) \| Respond to of 70976

kid, For once I agree with you, somewhat. The wealth effect created by a rapidly rising stock market with little attention given to company fundamentals is a dangerous thing for all who are invested. That being said, I find it hard to accept any notion that over a time frame of 1-2 years AMAT is overvalued. Yes, it is ahead of where it has historically traded during past downturns, but it is nowhere near its highs, as are most other companies, especially those with the largest capitalization. Given that AMAT should see phenomenol rev growth over the coming years, how can one say that a PSR of 2.7 is excessive when we have internet cos. with no earnings prospects for years trading at PSR's of 30+???? In addition, these cos. are operating in a low margin/highly competitive/commodity business where volume is key and is not at all guaranteed. What does AMAT have on its side? Huge spending on fabs in the coming years. The average fab now costs $2B; in 2010 that will be $10B. Taiwan alone has said they are going to spend $70B over the coming ten years. Add to that Intel's capex this year and multiply it by 10(leaving out any growth which is sure to happen) and you have another $50B. BTW, this recent downturn will compress the necessary spending into a shorter window, creating the possibility of huge runups that may trample the shorts. AMAT also has on its side .18mu and below procceses, copper prosseses, fab automation, DUV, EUV?- all of these cost $$ and are coming, regardless of how many posts you post to the contrary. Short AMAT at your own risk. The time is coming when even Kurlak will switch sides. The most recent BTB was .8; you must guess how much lower will we go? The question is, do you feel lucky....

To: jtechkid who wrote (19531)	5/20/1998 3:32:00 AM
From: Wildstar	Respond to of 70976

well, the stock market declines 28% from today and joe is getting nervous because his retirement account or guaranteed money is starting to dwindle. now everywhere he reads the media is doom and gloom and one day he is just sick of it because he can't afford his stock account to go down anymore or how wil l he retire in 10 years. joe calls fidelity and liquidates his whole portfolio and decides to keep money in the bank like his parents. well, multiply joe times 30 million and this liquidy driven market is over. the market always goes to extremes and the same extreme as everybody in america in the market will ultimately end the complete opposite. when, this is the major question. -------------------------------------------------------------- That is the million dollar question isn't it? My feeling is that it is going to take a lot to scare Joe because: 1)Joe has probably never seen a bear market. All he's seen is the market go up. 2)The last time we had a little "scare" back in October, and Joe turned on the TV and watched CNBC, all the talking heads were saying, don't sell, long term, buying opportunity, yadda yadda yadda and low and behold, Joe got all his money back and then some. Joe probably figures now, "Hmmm, if I had loaded up the truck back in October, I would have even more money today." So next time there is a 10% correction, Joe will be inclined to put more money in the market. 3)The incredible returns the market has provided in the last 4-5 years will make Joe continue to put money in the market. Joe thinks, "Hmm, if I can get 30% every year, I'll have more money than Oprah by the time I retire." So back to the question: When will the liquidity dry up? I can only see two scenerios in which this would happen: 1)a serious economic crisis - not just a "flu". I'm no Myron Kandel -g- but I don't see this happening anytime soon in the near term. 2)baby boomers take money out of the market because they need to use it for retirement. This is still a few years down the road. Until then, the market will continue to go higher and become more and more overvalued. The higher it goes, the higher it will fall when the liquidity does finally dry up. In the meantime, I think I'll buy some more Yahoo and Amazon. -g-