Roger: Interesting Topic BUT it would also be interesting to know your background.....
I would be interested in your background. Why do you not include a bio on yourself, your background, occupation and other relevent information? This would provide me and other forum members a common basis to address your topic with some usefull information.
You can look at my profile...I have nothing to hide. I invest my capital for a living and consider myself an intelligent investor not a speculator. I focus on "value" investing and am quite profitable doing that. Although I have been investing for over 20 years, I have done this full time for the past 7 years. I have built up a sizable portfolio based on my detalied fundamental analysis and have made excellent returns.
I do not fall in love with any company and always buy companies which I feel are undervalued (based on book value and current cash flow) and have potential to deliver better than expected earnings in the future.
I bought my first Apple computer serial no. 10 in 1976 but never invested in Apple because I felt it was always overpriced and it did not meet my fundamental 'buy' criteria. I do not feel NOVELL can be compared to an Apple computer based on many different criteria for measuring value. I can go into the detail but without knowing your background, you may not be able to understand my analysis and criteria for calculating fair value.
To respond to your inital statement: (1) "Novell suffered a debilitating loss that was much, much worse than expected." is not really true. If you have read the different posts on the Novell board (which I believe you have not), Novell's loss was not worse than expected AFTER you evalate the components of the loss specifically, the one time adjustments relating to the re-channeling of inventory, reduction in operating expenses going forward and adjusting the balance sheet for Novell's excellent equity investments, you will find that the comapny actually beat analyst estimates going forward for FY 1996 (IMO).
(2) "Only the tough, the die-hards, and fools are left to support Novell, and these people all use Mac"..I use Microsoft products and an IBM PC compatable. I have owned four different computers, only my first in 1976 was an Apple. I am no fool BUT tough relating to investments and typically ALWAYS against the trend initially.
(3) "Suffering the indignity of justifying a losing position in a dying company that nobody wants." I actually have a gain in the stock and my first purchase was in October 6, 1994. With the right strategy you can make lots of money waiting for the stock to turnaround. In 1995, I averaged about a 20% return writing covered calls with minimal downside risk w/ my entry point. I plan to make substantially more money in 1997 when the stock trades in the $28-$33 range.
(4) "How fast can you burn US$1,000,000,000?" Novell has a positive cash flow (their positive cash flow ....as you know you back out depreciation expenses, ranks them in the top tier of net cash flow producers) and is adding to its cash balances...even after all of their restructuring. APPLE however is another story.
(5)"Nobody, NOBODY, does a strategy like Microsoft!" Microsoft has been an excellent growth story and has generated excellent returns for their investors. Novell (IMO) will compete with Microsoft, but in a different manner (more along the lines of HWP). Once the market figures this out and understands Frankenburg's business plan AND Novell is able to implement this plan, the stock price will reflect true value accordingly. That is the time I usually sell 1/2 my position.
In the hopes of establishing a good debate...give me a profile about yourself, education, types of investments and why you bought them, your average holding period (I hold stocks no less than 18 months and usually up to five years AND make excellent returns!) and perhaps I can provide you a different perspective as to why NOVELL has excellent value and why Apple does not.
EKS |
