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

To: Paul V. who wrote (25720)	10/24/1998 4:18:00 PM
From: Gottfried	Read Replies (4) \| Respond to of 70976

Paul , we can avoid some of the arguments about the direction of AMAT price simply by recognizing that there are two ways to do the analysis. You and Tito (I think) look at supply and demand for the stock. In doing this you pay little attention to the fundamentals. This is basically how I would estimate the value of my house. Others, and I wouldn't even call them bears, look at fundamentals like earnings expectations. There is a tacit agreement among investors that earnings growth can be used to value a stock. This agreement is sometimes violated. Based on that analysis AMAT isn't worth $34 right now. Right now the supply/demand analysis is more correct than the FA based on earnings expectations. Now all we have to do is guess whether investors will change their minds and remember the FA.<G> If not, we'll have an AMAT price bubble long before orders or earnings improve. It's all very frustrating, even to analysts. "Industry perplexed, divided about chip market's direction" ebnonline.com Thanks to Denis K. Guenette for the link. Gottfried