Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Etec Systems moving up -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Bob who wrote (1043)	7/19/1998 5:11:00 PM
From: robert b furman	Respond to of 1279

Excellent Point Astutely Made JMHO It seems reasinable on top of all that. Bob \

To: Dr. Bob who wrote (1043)	7/19/1998 8:00:00 PM
From: Carl R.	Respond to of 1279

Ditto. But remember that the market almost always over reacts to perceived threats. Carl

To: Dr. Bob who wrote (1043)	7/19/1998 9:02:00 PM
From: jeffbas	Read Replies (1) \| Respond to of 1279

You have hit on one of my favorite subjects here. I suggest that you take a look at the ETEC IPO prospectus. You will find that far from making money in good times or bad it was losing money hand-over-fist for quite a number of years. This was because advances in stepper technology some years prior made it unnecessary to replace ETEC equipment in order to produce smaller feature size chips, and the company had to struggle to survive. In fact, I personally know someone who was responsible for ETEC matters at one of the blue chip corporate owners at the time who considered it a "problem child", a headache. THERE IS SOME PROBABILITY, WHO KNOWS HOW MUCH, THAT THIS COULD HAPPEN AGAIN, OR EVEN MAKE ETEC"S PRODUCTS TOTALLY UNNECESSARY. Now, what would you pay for the income from an oil well -- a very low multiple of the current payout, because it is CERTAIN that within 10-20 years or less that income will go to zero as the well is depleted -- and the price you pay has to recover your principal as well as a return out of what you pay. It is not certain for ETEC, but only possible. Well, for ETEC, if you were constructing a probability grid of possible outcomes for the company in order to determine the expected return, one of these outcomes for some amount of probability would be a limited life scenario. This is an additional risk to an investment in ETEC relative to the general risk all tech companies have that someone else just comes out with a better product (UTEK?). Therefore, I will stick to my view that the company should NOT carry a premium P/E. Of course, if I choose to buy it back some time, I will hope that Wall Street continues to ignore what I think is correct investment analysis while I own it <ggg>.