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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 92.99

+1.6%

Jan 15 3:59 PM EST

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To: Al who wrote (990)	4/5/1997 7:19:00 AM
From: Jeff Maresh	of 14451

Al - As I said earlier, I'm a long-termer and I will reevaluate the situation at the end of the year to see things change for the positive within the company. Peter Lynch states that in many cases, he makes the most money on turnarounds in the 4th year after he starts accumulating. The problem is that a lot of people have been treating the stock market like another "get rich quick" scheme which over the long term, it clearly is not. So first of all patience is the key here. Here is why they need at least that much time: 1. Cray (just about a year ago) was no small acquisition and not without risk. 2. New upper management needs time to make changes. Big ships need lots of time to make turns. 3. They need several quarters to regain the confidence of shareholders and prospective shareholders AFTER sales start to ramp up from the new product line. IMO if next FY Q1 & Q2 look good the stock price could start a solid upward move. IMO the round trip to $28 was based upon speculation, not fundamentals. 4. Origin sales will need several quarters to ramp up. I believe that this box is going to start having a bigger affect on the bottom line because of its use for web and database servers. IMO McCracken is competent but he's a mere mortal. He needs time. (Compare current SGI to Sun in early 90's doldrums). What do I do then at the end of the year? I'll figure that out when I get there. Also, IMO we are in for a pretty rough ride on the stock market through this year. I believe that although the next wave of earnings may be good for the market as a whole, one has to wonder if other multinational companies like SGI will also have negative effects due to the strong dollar. Also, historically the market moves up for the first few months after an interest rate increase but once the 2nd or 3rd one occur, its "bye-bye". Twas' early 1987 that rates started to rise and we all recall what happened in October... Regards Jeff You Wrote: As mentioned in the prev. threads, if the next couple of quarters continue to miss targets, one just have to wonder if Ed McCraken knows what he's doing as a CEO.

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