"My Plan is Foolproof, I call it Operation Grandslam"
Sir,
Despite ultimate failure, the real Goldfinger did some homework.
Have you talked to the vendor's customers? Have you seen the vendor's products? Have you studied the cashflow statements and examined the business model?
When InfoQuest is done selling, do you think there will be any significant downward pressure on the stock?
Truthfully, I would love it to stay in the $12 to $13 range for the next 12 months. Gives me plenty of time to accumulate more and more. And I think Aremissoft's plan to recapitalize via the "Class A" strategy deserves a failing grade -- that is an "F". Sort of dumb, when they should just let their stock price take its own course.
I do not give the management the highest marks, but the company has such a solid business plan and is executing it wonderfully. You do have to give them credit for holding off on GlobalSoft and buying AREM shares. At some point AREM will be back in the $30 to $40 range and then they can use shares or cash to continue their acquisition of GlobalSoft. I give them extra credit for this move. A+
As far as their handling of the recent Street.Com and NYSE articles, I give them a C-. They have correctly responded, but could have done a better job.
So, overall I think their recent actions have not added to their credibility, except for the share buyback. This is almost an indisputable good sign (Can you name five companies that have aggressively bought back shares recently, that did not have a sound business model?)
Anyway, if I didn't feel some responsibility, I would keep quiet and continue to make a profit on this unfortunate situation (the longer it stays in this range, the better I do; the lower it goes, the better bargains I get). But the company is such a good one, and has such decent people -- I have met several, and only have positive things to say.
If you had big bucks, I would advise you to continue to short in order for me to profit from your ignorance. But since you are probably a very small investor, I might as well warn you that this is a real company, with real customers (particularly in the UK), with a solid business model and a sound approach to executing their strategy. If you are like the real Auric, you spend time in the UK -- stop at two or three of their customers that use their manufacturing software or their hospitality software. Ask them about the reliability and ease of use -- ask them about the quality of AREM techies. Take a look at the type of calls that come into AREM's support center. Talk to one of their tech folks about their development practices. Do enough homework so you are at least aware of the tremendous risk you are taking by being short -- high risk, low reward -- whereas on the long side -- high reward, low risk.
RDH.
p.s. I was lucky enough to have invested in CNC last year when it was beaten down. A great move -- but it was much riskier -- CNC had debt and some serious problems. When Irwin Jacobs came into the picture, it took a while for the stock price to revive -- this was a much riskier investment, in my opinion, for Mr. Jacobs then AREM. I still have my CNC, and if I didn't believe in diversification (for us older folks), I would sell my CNC, WRLD, ABFI, FTU, etc. to scoop up plenty of AREM since it is much safer and fundamentally stronger then any of my other holdings. (I have sold some IKN and SVRN, both of which have recovered nicely, in order to buy more AREM) |
