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Technology Stocks : Softbank Group Corp
SFTBY 70.44-3.2%Nov 7 9:30 AM EST
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To: Edwin S. Fujinaka who wrote (1308)8/14/1999 4:32:00 AM
From: Seeker of Truth  Read Replies (1) of 6018
 
Some stocks are volatile because they are selling at high p/e s and the market is alternatively lured by the growth and repelled by the price. Other stocks are volatile because some of the value does not appear in the earnings so these invisible (to an accountant) asset increases are alternatively noted and ignored. Suppose we develop a new product, spending some millions of dollars. The product is ready to ship on the first day of the next fiscal year. The conventional accountant says only that we lost the millions of dollars this year. The same is true if we spent those millions on incubating fledgling companies. I expect that Softbank will be volatile for both of the above reasons.
Companies like CMGI, BRKA and Softbank will always be hard
to evaluate. The P/E on current earnings may not correctly
convey the entire situation. I wonder if anybody can consistently have good timing in such cases. I doubt it. In other words timing will be one of the "weak points" for everybody. JMHO. In making an investment we should always have a conclusion about the long term future of the company and about the reasonableness of the current price range. As for the latter point, we have 20,000 yen as the approximate figure for the underlying share values of the listed companies owned by Softbank. So it looks like 20,000 to 40,000 is a fair value range. That doesn't answer anybody's question.:-) Let's face it, timing, i.e. pricing is a guessing game. I held a Norwegian stock once for 7 years without making any money on it. I dumped it and you can guess the rest. It then skyrocketed. We diversify because we're uncertain, eh?
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