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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (43605)	1/15/1999 9:37:00 PM
From: Mike M2	Read Replies (2) \| Respond to of 132070

Paul, how about Intel's PE expands as its rate of growth slows. Mike

To: Paul Engel who wrote (43605)	1/15/1999 11:22:00 PM
From: Earlie	Read Replies (2) \| Respond to of 132070

Paul: Am I a clown? Well I do feel like one in this market from time to time, and also when dealing with intellects that apparently can respond to a challenge with only a lonely limp red herring and rudeness, but what the heck, we all do dumb things from time to time.. With respect to your single comment, the doubling we mutually refer to has taken place over the last two quarters rather than the two years you cite. Perhaps that was a typo. In response to your request for pertinent facts: INTC traded below $20. until early 1995, climbed above $40 in late 1996, and traded $60 to $100. from late 1996 to November 1998. Growth in revenues, and EPS more or less supported the early stock price appreciation, but as both peaked out in December 1996 and March 1997 (Revenues at $6.4 billion and EPS at $1.10) then slid sideways or eroded until this recent quarter, (i.e., for two years), it sure hasn't been business results that have driven the share price appreciation over that interval. The year just reported wasn't a barn-burner. Profits were down on marginal revenue growth, cash is disappearing, DEC pinned their ears back and dumped excess capacity on them, the Justice boys seem to maintain an interest in their business ethics, the Merced chip somehow slipped through the cracks, the Celeron chip was both late and an early embarrassment, Rambus is causing problems, AMD has eaten Intel's lunch and grabbed a big piece of INTC's market share in less than a year, price wars are commencing, cash is disappearing and their main end product market is flattening out. Now should we pay $135 for this? Only if a case can be made for stunning growth in 1999. Now let's see. Business spending for PC's is falling off rather rapidly, and some observers like Earlie see an inventory overhang much larger than last year's (which caused beaucoup problems as I am sure you are aware,... remember CPQ's single penny of profit last year in Q1 when the N.Y.cheerleaders were expecting $0.35?). Even INTC management doesn't sound enthusiastic about Q1, but of course things will pick up thereafter. Sure it will, especially as one country after another peels off the list of prospective buyers of anything other than essentials. One could go on and on. Situations like this are grist for a short's mill, so long as patience is applied. Thank goodness for those enthusiastic momentum boys who create these nice opportunities. Earlie