Hi Lizzie:
I am not suggesting there is only one way to evaluate an investment. Neither I am suggesting anyone short Oracle or not buy Oracle. I am merely recognizing one measure of risk, noting that Oracle has generated very little book value over and above paid in capital over the years, and that in my opinion, employees have been paid excessively in relation to this internal financial performance of the company. Were Oracle to perform similarly over the next ten years, I would say Oracle has some downside risk if, and this is a very big "if", investors were to return to more conservative valuation measures, for example, valuing a business as the sum of future discounted cash flows available to owners.
Having said that, if someone put a gun to my head today and said I had to either buy or short Oracle, I would be more inclined to buy, figuring that it still seems to only take fair to midland real, internal financial performance by a tech company to attract tech investors that are willing to award said companies with very high valuations. In addition, I view Oracle as reasonably well positioned relative to its competitors and a long term survivor.
Regards, Huey |
