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

To: Big Bucks who wrote (25149)	10/9/1998 10:50:00 PM
From: Bruce Dorval	Read Replies (1) \| Respond to of 70976

BB, My impression is that that column was mislabeled and should have been called: "Forward PE" As your calculation indicates, it is not an estimate but rather a statement. Bruce

To: Big Bucks who wrote (25149)	10/9/1998 10:56:00 PM
From: KLINVESTOR	Read Replies (2) \| Respond to of 70976

Big Bucks, Using PEs in a wildly volatile market like semi-equips is illogical since the reverse logic can be used when looking at some of the smaller cap semi-equips like Cohu which is trading at a 4-5 trailing PE. How is that justified? Cohu dominates their niche and yet has such a low PE. The reverse is true in looking at the downside earnings expectations of the next 12 months. My point is trying to value a semi-equip on a 12 month PE is irrationale. I do believe that AMAT is a bit expensive given the valuations of the smaller niche players in the industry but a 12-month PE is not the way to determine that. Ultimately, you have to look at future earnings expectations and the comfort of a big cap stock like AMAT versus the alternatives. I got a lot of "so what comments" when I posted a few weeks ago that semi prices were strengthening so I thought I should go ahead a hear the same again now since once again they are strengthening as follows: smithweb.com smithweb.com My point is still the same which is I believe that the pessimism is so strong in this segment right now that everyone is ignoring the improving signs we are seeing. Yes prices have dropped dramatically over the past year for the DRAM but the capital expenditures in this industry have dropped dramatically also. I believe the seeds are being planted for a very big rebound since additional demand drivers are around the corner like a new version of NT (with significant requirements), year 2000 upgrades, increasing demand even if it is in lower priced PCs, and even the current debacle in Asia will ultimately feed the rebound. I believe the Asia situation will feed the rebound since a lot of upgrades are being deferred there and technology keeps marching forward. Once these economies get their act together they will have to upgrade most computer equipment since this has been delayed recently thus feeding a significant demand increase in a few years. Yes things look pretty bleak right now in the market but underlying the soft stock market is the very low interest rate environment and a significant increase in liquid assets (money market fund growth, etc.) which will ultimately pour back into the market when investors get comfortable again. I don't think this is the end of the bull market as we know it. Certainly a setback but strong growth companies will continue to do well over the next few years and most of the solid semi-equip stocks will do well in this environment! Good luck to all!

To: Big Bucks who wrote (25149)	10/11/1998 9:40:00 PM
From: blake_paterson	Read Replies (1) \| Respond to of 70976

<<AMAT is projected to have an estimated forward PE of 36 on earnings of $0.66. Does this make sense to anyone else?? If so please explain.>> BB Like you, I'm looking for < $20... Believe "fair value" (no, I don't have quantitative criteria for this term) is in the mid teens. Don't know how to use PE's in the context of negative earnings growth... I've been guessing a loss and a price of $17.50 (for this Q) since the last cc; sure hope my gut is correct, 'cause then I'd likely get back in to this and KLAC. I rotated out of equities in August but then was too greedy/stupid to stay out. Nonetheless, all of my guns will be aimed at this sector, just don't know how long we'll have to wait for the ever elusive "bottom," and whether it will be Death Valley Days thereafter for 1 year or 1 month. Gut says 4 (months). Lots of maalox. Regarding the bottom and your strategy, what will you do after your first pruchase if it doesn't drop the requisite $2. Stay or bid? BP