<I firmly believe that ORCL will lead the world in supplying the internet with database, application server software and applications. If you believe the above, can you tell us what you think is a good entry point.<
A complicated question... without question ORCL is and will remain the dominant DMBS vendor in the world. Question is how much growth is there in that market? The "new economy" is looking more like a mirage than a reality as the bricks and mortar guys show more staying power by expanding to the internet than the internet only guys have. The bricks and mortar type companies are already ORCL customers and expansion of internet applications will lead to some business, but, not an explosive expansion. Growth in this area is probably in the 15% range/year.
Regarding what you called application server software and applications, I am not at all convinced that ORCL is going to be a top dog. Competition is intense and ORCL hasn't shown that it can really execute on the sometimes grandiose visions that Larry has. The apps business, in particular, is a vicious dogfight that ORCL is not going to roll over the competition in. LE has talked and talked and talked about their app biz, but, where's the beef?
If Larry wasn't such a braggadocious person I'd take what he says more seriously...
At any rate, I sold out my whole ORCL position between $40-$32 because I just didn't like the overall market trend and ORCL's in particular. I'd like to buy back in around $15. Which I think is a realistic price under the current cloudy conditions. I think ORCL may get there sooner than later.
However, in the final analysis I won't be opening any major positions(in any company) until its clear to me what the direction of the economy is. My feeling is that a "hard landing" is very possible(50/50) and that any reaction by the Fed will come too late to head this off if it starts to happen. This could lead to a very serious situation since many overseas company's are very dependent upon sales to the U.S. Result could be a severe global recession. If that occurs I would not be surprised to see the Nasdaq bottom out in the 1000 area. ORCL could easily breach $10 if that were to occur.
I don't mean to sound like a doomsayer, but, these possibilities do exist and one must balance the risk against the reward. ORCL at $25 is still richely valued IMO. The momentum is gone and only performance will drive the stock price. |
