Charles, I dug up some of the messages that we exchanged during Feb 2001, which was 4 dot com jobs ago for me (well, all 4 went out of business during the last year and a half, what a surprise!) I wonder how has your position changed since on SUNW? Back then SUNW was at around 18, 19.
Well, it seems like my forcast one and a half years ago was still right on. They still haven't made any money off java, and looks like they never will. I just don't know why I didn't have the courage to sell at 18 or 19 and never look back again. Instead, I choose to average down. I made the right prediction on the technical side, but I made the mistakes on not following my sense. I just continue to think at this level, SUNW is cheap, and things will turn around.
Today, I no longer hold this view, but SUNW's price is at a point where it's irrelavent for me to whether sell it now, or sell at $2, or $0.20. It's going to be a tax write off tool for me for years to come now.
Sometimes, you just have to learn from the mistakes and move on to other investment ideas. You can't be stubborn enough to follow your instincts. I hope Mr. McNealy has the sense to do that and move on from his MSFT bashing.
Here is what you wrote on Feb 21, 2001:
In fact, that's pretty much what the graphic "Windows 2000 replaces NT at a steady clip" (near the bottom of the main article in your cite) shows. The total looks like it grew at a pace similar to (less than, I think) Sun's growth rate last year, implying no capture of market share.
That price looks really cheap to me. I'm trying to figure out when to commit some bucks (and how to convince my wife that's a good idea <g>); as most of those assembled here already know, however, I'm already in pretty deep.
Here are my responses:
Charles, I am in pretty deep myself too.
I don't think it's time to buy. I will wait and see what they say on the conference call. The after market price of 18.94 reflects a PE of exactly 30. It seems extremely cheap, but I doubt those who are selling today even look at the PE or PEG. And I doubt the people tomorrow or Friday look at those numbers either. Fear is taking over, and any buy will just trigger a massive amount of sell.
We need to focus on the long term picture. Is Sun's current problem due to the economic downturn? It's pretty obvious that the answer is yes. Will it be the first stock to go up when the economy turns around? I am not sure. But I am not expecting any return in SUNW in 6 months. I think it's going to be dead money for a while. Don't rush to buy yet.
What was the difference between SUNW today and DELL couple years ago when the
stock was at its all time high?
I wouldn't call DELL a high tech company. It's just a box maker, which you
and I can probably do ourselves: buying computer parts and assemble them in
our garage. It uses Intel's processor, Viewsonic's Monitor, Micron's memory,
Seagate's hard drive, Microsoft's OS and applications. On top, it provides
some support. Which part of the actual computer is Dell's technology? None.
SUNW has its own technology. It designs its own processor, it develops its
own OS, it provides a programming interface in Java to allow application
programmers to develop apps on it. Apple failed when it tried to be both the
hardware and software vendors for Mac. Will Sun follow? Is Sun's approach of
doing everything themselves in the market they are in a good idea? On one
hand, you have Microsoft trying to move into the server market with their .net
initiative. On the other hand, you have the Intel camp churning out higher
end processer to move in this market as well. On top of that, you have the
Linux company flooding cheap intel/linux server boxes out there. The Java
client swing programming is a big failure in my opinion. So sunw has lost its
battle in this front vs. Microsoft's MFC. Will .net beat J2EE? I haven't
seen it. Will C# beat Java? Maybe not. Has MFC beaten Swing? Yes. Has IE
beaten Netscape? Yes. Has IIS, Apache beaten IPlanet? Maybe not, but maybe
it doesn't matter. Has Window CE beaten Jini? I think so. Has EMC beaten
SUN is the storage market? Yes. Has Merced beaten Ultra Sparc? No. Has
Windows or Linux beaten Solaris? Maybe not. But I am questioning the fact
that SUNW is doing everything when its bread and butter is in its server
business. Has SUNW made any money off Java? No. But I know Microsoft has
made a hell lot of money from Windows, MFC...
SUNW is a hell of a technology company, with the number of Java programmers
out there, and the likes of Billy Joy, James Goselling on board. But it can't
be everything in this market. It needs to figure out a way to make the most
money off their servers. |
