Coke, Microsoft, Apple, and Novell
>Why is Coke valued with 40 P/E?
As a person who bought Coke (pre-split) within the last 18 months at $55 and sold at $65, I believe it's because of excesses in the market. Then again, I'm sure that rationalization is important to me since I'm now sorry I sold.
>Of course, I said 'own', not 'buy'. I'm not buying MSFT today, I'm
>buying INTC, among others. I'm hanging onto my MSFT though. :-)
I too wouldn't buy Microsoft today -- way over-valued. Of course, I thought the same thing several months ago at $90. Bottom line: I agree with you and if I owned it I'd hold it.
Apple isn't discussed much in this thread (despite the newsgroup's title) -- but it's probably clear to everyone given the terms and conditions of Amelio's contract that he is responsible for selling the company at what the board considers to be a reasonable price.
After asking lots of questions in this medium, I'm still not clear on Novell's future. Fundamentally, it appears to me after all the discussion that their is a belief in the company that its core problems were that it wasn't aggressive enough and didn't have good enough marketing. Of course, when Noorda was buying Wordperfect and Unix that was pretty aggressive -- but with the benefit of hindsight most think that was the "wrong" type of aggressiveness.
As I've said before, I don't think Novell's issues are "aggressiveness and marketing" -- IMHO the only things that these could possibly do is to get a short-term bounce to the company to prepare them for a sale -- and I'm not at all clear on who would buy them. The fundamental problem is one that Noorda was trying to solve with the purchse of Unix and which Novell executives have recognized since at least 1990 -- the fact that general application servers capable of doing some parts of file and print servicing would eat away at the dedicated file and print server market.
The analogy with Silicon Graphics is a good one -- SGI makes the best graphics workstations in the world. NT is a joke to people doing real-time highly-complex graphics. Of course, each year NT gets a few more applications, gets a little faster, and is able to do a little bit more in this area -- thus SGI is a dominant provider in a market shrinking through the slow but steady march of ubiquity. Likewise Netware is the best in the world in file and print services -- but with NT doing a little bit more each year, things don't look good.
I don't want to "shout into the wind" and make the same post over and over: so to try to sum all of this up I believe that many people on this thread have as a fundamental premise that customers of computer operating systems are stupid. No doubt some are -- but the vast majority of corporate IT decision makers tend not to be (in my experience). NT is doing as well as it is through the ability of Microsoft to sell a story. That story is integration with the dominant Microsoft desktop (which is why Noorda bought Workperfect) and the first ubiquitous general purpose operating system (Unix fragmented too quickly and will continue to be fragmented forever -- NetWare is a file and print server).
What would make me buy Novell? Something beyond the sentiments that "how much lower could it go?" and/or "we're the new Novell -- we're going to be more aggressive and do better marketing". If I saw a strategy that built upon the NDS port onto NT as a wedge for gaining a strategic advantage in file and print servers long-term, that might do it. In fact, any facing of the reality and steps to confront and master the reality of the situation that Novell finds itself in might do it.
Believe it or not -- I have high hopes that Novell will take these steps once they get through with the morale building exercise they're going through now. John Young is certainly capable of it if he cares to be (I don't know the president dude -- although I am partial to aggressive management). Getting a CEO who understands the industry and is brave enough to face reality is a pretty fundamental step toward all of this. Until then -- even though I may lose a fantastic opportunity I just can't see -- my money is going to stay in other places.
As always -- I'd ***LOVE*** to be educated past my biases and stupidity -- even if in doing so folks have to say I'm full of crap.
Thanks,
Mark |
