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To: Skeeter Bug who wrote (42307)	1/16/1999 3:57:00 PM
From: Carl R.	Read Replies (2) \| Respond to of 53903

I disagree. Analysts tend to project the present into the future. With growing earnings, they project continued growth. The $12 to $17 estimates were continuations of the then current trends, and therefore seemed reasonable enough - until the circumstances changed. But if earnings are negative, analysts tend to project a gradual improvement, and not a sharp reversal. But sharp reversals are as likely as a gradual recovery. MU is much larger than they were the last time the stock was at these levels, and if the market is good, it is not impossible that they could earn $12 in 2000. My point is that I agree that long range estimates are not of much value, but that they are at least as likely to be low as they are to be high. As an example, KLIC had a bad quarter in late 1996, and analysts projected a gradual recovery with a net loss for 1997. If you check you will see that they in fact had a sudden reversal. This occurs at least as often as a gradual recovery. Actually in 1996 analysts kept reducing and reducing estimates for 1997 for all the equipment companies, only to have to reverse course and raise them again as the industry recovered faster than expected. Of course once things were recovering, they overshot for 1998. When things looked bad, their estimates were low for the recovery period. Once the recovery was well underway, they overshot for the continuation of the recovery. So in 1996 as things worsened, their estimates were too low for 1997. In 1997 as things improved, their estimates for 1998 were too high. I would not be surprised to see the same thing for MU. 1998 was a year of worsening conditions, so current estimates for 1999 and 2000 should turn out low. If things improve in 1999, then it is possible to see overly high estimates for 2000 and especially for 2001. Carl