We all should constantly monitor and question our investment judgements We should be looking for contrary facts. On the other hand,contrary opinions are plentiful and can easily mislead us into acting contrary to our own better judgements. All those who looked at Ckfr and decided not to buy; all those who sell the stock every day; and all those who are short the stock represent contrary opinions. There are plenty of those.
With respect to competitive pressures, it has taken Checkfree 15 years to achieve the position of dominance it finds itself in today. If someone wants to spend $40 million and take three years they could conceivably duplicate what Checkfree has achieved. But it doesn't seem that the industry wants to wait until that happens. If Visa was able to do it, they wouldn't have had to pay Integrion to take them out of the business. If Integrion was able to do it, they would have done it and 12 of the 16 Integrion banks would not have signed 3-5 year contracts with Checkfree. If Bank of America could do it, they would not have given Checkfree their non-California business. If Wells Fargo could have done it, they would not have folded their own processing operation and turned it over to Checkfree. Can CitiBank do it- they lose heavily doing it now? Furthermore, it's illogical to think that other banks would turn their customer names over to a competitor bank. The banks are certainly not going to turn any part of their business over to Bill Gates, who has publicly called the banks prehistoric animals that he was going to have for lunch. In fact, it was the fear of Microsoft that caused a number of large banks to form Integrion in the first place. Does anybody think that Microsoft is going to be the backend processor for the banking industry and that the industry is going to turn their custmer names over to Bill Gates, even if Microsoft had a back end processing capability, which it doesn't and isn't likely to have in the near term. Who is left? Who indeed, other than the figments of our imagination and fears? That is what makes Checkfree a unique and compelling investment.
I might add that in the bill presentment and bill payment end of the business, (which promises to become even larger than consumer home
banking) while Microsoft/First Data are attempting to convince the world that their attempts to get into that business are more than vapor and that they will have some kind of operating system going in the months ahead, Checkfree meantime is signing up major customers right and left.
You are right that nothing lasts forever, but we are investing for the long term, not the hereafter. Everything that I could find says that Checkfree enjoys an unique position in an industry that is about to explode. Keep a wary eye, but enjoy, and hopefully profit, from the ride that is about to take place. |
