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Technology Stocks : 2000 Date-Change Problem: Scam, Hype, Hoax, Fraud
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To: Done, gone. who wrote (216)10/7/1997 8:46:00 AM
From: Sid Turtlman   of 1361
 
Michal: It is a shame you don't have one IQ point for each spam you have dumped onto this thread; if you did, you might notice the big flaw in your bullish case. This particular post of your includes at the end a long list of government agencies and when they expect to complete their Y2K projects. You will note that in all of them the date is 1999. That means that whatever earnings outside vendors actually have serving that market, it will all be over in two years.

Yes, I know, a few of them have outside businesses, mainly of the low margin "body shop" rent-a-programmer type. Yes, I know, a few of them claim that their Y2K conversion software may have other uses as well; for example, I am sure they will be ready to jump into action when the year changes from 9999 to 10,000 and legacy systems have to be upgraded to five digits from four. But any profits after 1999 will be dwarfed by the companies' valuations.

So how much should one pay for two years of good earnings? Not much. A similar situation existed in the late 1970's to early 1980's, when there were certain oil companies and public limited partnerships that were doing little prospecting, just pumping and selling off oil from their existing fields. A lot of stupid people bought them because they seemed so cheap relative to earnings and dividends, forgetting that they were short lived. Once the oil was gone, they were worth nothing.

That was before the internet allowed stupid people to amplify their viewpoint with multiple posts, so the situation is even more absurd now.
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