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To: Sarmad Y. Hermiz who wrote (65243)8/6/2002 12:55:00 AM
From: Donald Wennerstrom   of 70976
 
One place to get information on PSR is at Quicken.com. Both quarterly and annual PSR numbers are available. The quarterly numbers are at:

quicken.com 

Note also, on the same page, the comparison numbers(trailing 12 months) for AMAT at 4.62, Industry at 16.59, sector at 19.33, and S&P at 10.09. Both PE and PSR are at numbers significantly lower than the industry averages.

Don

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To: Sarmad Y. Hermiz who wrote (65243)8/6/2002 1:57:08 AM
From: Gottfried   of 70976
 
Sarmad, calculating PSR for the trough year '98/99

AMAT sales for '98 were $4B

Shares out this year [2002] are 1.65B. Assume it was the same number in '98.
Sales/share were $4B/1.65B sh = $ 2.4 / sh

Lowest price was $5.8 in Sept '98

Best [lowest] PSR was $5.8/$2.4 = 2.4 Sep '98

--------------------------------------------

Now let's calculate PSR for the time after the '98/'99 trough when SEMI sales were about the same as now and rising. That would be Feb/March '99 and low price then was $13.7.

Thus PSR was $13.7/$2.4 = 5.7

---------------------------------------------

Conclusion: PSR was 5.7 in the same point of the cycle around Feb/March '99.

[Using SEMI sales to find the same point in the cycle assumes Applied's portion of SEMI sales is the same now as in '98/'99. Since Applied has gained market share it's probably greater now]

reference home.attbi.com 

PS: no speculation about the future here - just existing facts everyone can check.

Gottfried - please check my math

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To: Cary Salsberg who wrote (65235)8/6/2002 2:02:42 AM
From: Sam Citron   of 70976
 
I can't see rewarding error with more cash.

Good for you, Cary. Looks like you have learned the #1 lesson of Bear Markets: Husband Cash.

Your only errors were in assuming the market is as rational as you are and not having any ammo left for the "mother of all buying opportunities" at 2x book. NVLS is there now.

The sense of a buyers strike is almost palpable these days. There's just no point in catching the falling knife anymore. Value investors only have so much cash to support the stock market at implied FMV. Now the second richest man in the world is just beginning to bid for pipeline and telecom assets at UMV (unfair market value). These are "heads he wins, tails you lose" deals that are not available to the general public and do not directly involve equity, but rather $500 million loans secured by $2 billion natural gas pipelines from Oklahoma to Omaha and Chicago. Who needs stock that's worthless in bankruptcy, when you can negotiate your own secured debt placement with a distressed seller who has sold the public a ton of stock during the bubble to build an empire that is temporarily in tatters? But as Buffett is not bidding for stock, it is doubtful that his billions will do much to buffer a bear market. Too bad for stocks. Those billions will be missed. Should have known when he was buying Moody's that this was not to be the Golden Era for stocks.

Conventional wisdom suggests that stock prices eventually get to a point that the Really Big Money will bid for shares. I'm not sure who that is, but when he does it will be almost like a flock of birds taking flight at the same instant. Nobody will want to be left behind. The sellers will momentarily disappear and prices will be up 20% in a matter of days as short covering adds fuel to the fire. But soon that fire will be spent and we will have to test that bottom again. If it holds -- great, the momentum funds will be able to buy again. There is so much anticipation of the bottom, however, that I am inclined to think it may not come for another year, so that an entire generation of investors can be thoroughly disillusioned and totally washed out. Isn't that what is supposed to happen after a bubble? Scary? You bet!! Like the Japanese -- too frightened to invest, to spend, or do anything but put money under a mattress. It's not happening yet. We're Americans and it's our patriotic duty to spend right up until bankruptcy and then get a second chance to spend again. Statistics show we're still buying cars and houses like crazy. But let's see what happens if/when the bombs go flying over Baghdad right before Election Day, or if oil spikes, or if we ever have to pay for these wars with higher taxes, or if interest rates go back up.

I can't figure any of this out so, like you, I'm stuck husbanding my remaining cash waiting for the mother of all buying opportunities or until my wife needs it, whichever comes sooner. <g>

Sam

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To: Gottfried who wrote (65245)8/6/2002 8:49:42 AM
From: Sarmad Y. Hermiz   of 70976
 
>> please check my math

Gottfried, the math is correct. But I think the point here is that P/S ratio really is a range, and not a single number. I guess that was pretty obvious already. And the current reading is well within the range.

However, the forecasting aspect of your calculation is in where in the cycle we are at this time. It does look like the trough in sales is behind us, and future Q's will show higher revenues. I sure hope so, for my financial future.

As everyone is saying, Cisco's report today will shed light. ANd AMAT's soon will show even more about our place in the universe ... er ... I mean semi-cycle.

I glimpse some green on cnbc ticker. I hope it lasts.

Sarmad

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To: Sarmad Y. Hermiz who wrote (65247)8/6/2002 8:57:56 AM
From: Gottfried   of 70976
 
Sarmad, >the point here is that P/S ratio really is a range, and not a single number< You sound like an analyst now <bG>. I gave a minimum and a higher number for '98/'99 PSR. You want a maximum, too?

No streaming quotes from Datek yet, bummer.
Those pre-calculated PE and PSR numbers can't be trusted.

Good luck to all today.

G.

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From: Cary Salsberg8/6/2002 10:58:49 AM
   of 70976
 
OT

"Moderate Arab States"

Posted on Tue, Aug. 06, 2002

Saudi Arabia castigated in briefing
REPORT TO PENTAGON BOARD ACCUSES NATION OF AIDING TERRORISTS
By Thomas E. Ricks
Washington Post

WASHINGTON - A briefing given last month to a top Pentagon advisory board described Saudi Arabia as an enemy of the United States and recommended that U.S. officials give it an ultimatum to stop backing terrorism or face seizure of its oil fields and its financial assets invested in the United States.

``The Saudis are active at every level of the terror chain, from planners to financiers, from cadre to foot-soldier, from ideologist to cheerleader,'' stated the explosive briefing, which was presented July 10 to the Defense Policy Board, a group of prominent intellectuals and former senior officials who advise the Pentagon on defense policy.

``Saudi Arabia supports our enemies and attacks our allies,'' said the briefing prepared by Laurent Murawiec, a Rand Corporation analyst. A talking point attached to the last of 24 briefing slides went even further, describing Saudi Arabia as ``the kernel of evil, the prime mover, the most dangerous opponent'' in the Mideast.

The briefing did not represent the views of the board or official government policy, and in fact runs counter to the present stance of the U.S. government that Saudi Arabia is a major U.S. ally in the region. Yet it also represents a point of view that has growing currency within the Bush administration -- especially on the staff of Vice President Dick Cheney and in the Pentagon's civilian leadership -- and among neoconservative writers and thinkers closely allied with administration policymakers.

One administration official said opinion about Saudi Arabia is changing rapidly within the U.S. government. ``People used to rationalize Saudi behavior,'' he said. ``You don't hear that anymore. There's no doubt that people are recognizing reality and recognizing that Saudi Arabia is a problem.''

The decision to bring the anti-Saudi analysis before the Defense Policy Board also appears tied to the growing debate over whether to launch a U.S. military attack to remove Saddam Hussein from power in Iraq. The chairman of the board is former Pentagon official Richard Perle, one of the most prominent advocates in Washington of just such an invasion. The briefing argued that removing Saddam would spur change in Saudi Arabia -- which it maintained is the larger problem because of its role in financing and supporting radical Islamic movements.

Perle did not return calls for comment. A Rand spokesman said Murawiec, a former adviser to the French Ministry of Defense who now analyzes international security affairs for Rand, would not be available for comment.

``Neither the presentations nor the Defense Policy Board members' comments reflect the official views of the Department of Defense,'' Pentagon official Victoria Clarke said in a written statement issued Monday night. ``Saudi Arabia is a longstanding friend and ally of the United States. The Saudis cooperate fully in the global war on terrorism and have the Department's and the Administration's deep appreciation.''

Murawiec said in his briefing that the U.S. should demand that Riyadh stop funding fundamentalist Islamic outlets around the world, stop all anti-U.S. and anti-Israeli statements in the country, and ``prosecute or isolate those involved in the terror chain, including in the Saudi intelligence services.''

If the Saudis refused to comply, the briefing continued, Saudi oil fields and overseas financial assets should be ``targeted,'' although exactly how was not specified.

The report concludes by linking regime change in Iraq to altering Saudi behavior. This view, popular among some neoconservative thinkers, is that once a U.S. invasion has removed Saddam from power, a friendly successor regime would become a major exporter of oil to the West. That new flow of oil would diminish U.S. dependence on Saudi energy exports, and so -- in this view -- permit the U.S. government to finally confront the House of Saud on the charge of supporting terrorism.

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To: Cary Salsberg who wrote (65249)8/6/2002 12:16:46 PM
From: willcousa   of 70976
 
OT - There is a lot of food for thought in that article. Many thanks for posting it. I have been thinking about the many strategic advantages that US control of Iraq would provide. These include bases from which to impose our will on Iran, Syria and Saudi Arabia as well as the potential to totally break the power of opec.

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To: Gottfried who wrote (65245)8/6/2002 1:05:19 PM
From: SpecialK   of 70976
 
Gottfried, here's some more math numbers for you.>>

AMAT sales for '98 were $4B

Shares out in '98 were 1.512B share (equivalent after 2 splits)
Sales/share were $4B/1.512B sh = $ 2.64 / sh
Lowest price was $5.8 in Sept '98
Best [lowest] PSR was $5.8/$2.64 = 2.2 Sep '98

Note: the revenue in 98 was 4.04B, in 97 was 4.07B and in 96 4.14B. Income from operations went from 600M to 500M to under 300M from 96 to 98. Shares increased slightly over that time. The stock was probably ~$3 in 96 on the same revenue, so lowest PSR to 96 is maybe 1.1.

Ketan

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To: Cary Salsberg who wrote (65235)8/6/2002 2:23:17 PM
From: Hayduke   of 70976
 
Cary,

If a wand were waved and all your puchases to this point erased, what purchase strategy would you adopt going forward? How would you revise and improve your approach?

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To: Hayduke who wrote (65252)8/6/2002 2:35:35 PM
From: Cary Salsberg   of 70976
 
I would not revise or improve, but I would be able to buy lower. Today, I would buy 100% of the shares of those that are at or lower than the bottom of its(my) range and I would buy a % of the others based on the number of range levels it has fallen past.

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