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Technology Stocks : George Gilder - Forbes ASAP
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To: Cosmo Daisey who wrote (2203)10/21/1999 12:42:00 PM
From: DavidD  Read Replies (2) of 5853
 
I don't agree with following trends with no other info. It is relative value that counts. See the Gilder steps for investing.

It is very hard to measure, but I see value in GBLX because some large telecom will buy it for a premium. The scale on which businesses can manage info on their assets and customers has increased exponentially over the last ten years. Now it needs to be connected in (almost) real time. So fiber is a major asset valued by major companies. Easy to understand the demand, if not how the MCIs of the world calculate how much they would pay for them. I leave that to the analysts. The rumor is that Deutsch Telecom might make a bid.

I like optical companies because my fathers company has a stack of 23 T1's (T3?) to hook up to MCI fiber network (they recently dropped IBM and their connection equipment because of minor failures every week (that rate has dropped to once every few month with MCI), connecting his regional offices to HQ. Now, who the hell is going to make that last mile economical to manage for companies like his? TERN, according to GG. I am thinking of buying here, but would like to see it go down around 35, my nose tells me that it looks weak in the short term.

But most importantly TERN is trading at 48 times this years estimated earnings and 31 next years. That is a growth rate of 54%. The old Peter Lynch rule of thumb is pay a PE less than the growth rate. Of course with many technology companies the growth is measured by revenues, not profits. When it can be measured by profits, all the better.

IMHO
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