<< Can anyone lay out a "perspective" of what they see happening here? >>
Here's my view: A while back a little company -- APM -- had a great quarter. But their stock went down! Seems a large competitor had a bad quarter and the whole group fell.
The people who worked at APM said, "Why should our stock go down? We Just had a great quarter."
Many people on this thread, like me, work with Oracle. It's a good company, they say, a market leader. Good software.
Sometimes this thread is too focused on Oracle and it's software. People are more comfortable swapping stories about when they used to edit .inp files than engaging in a discussion of various market forces.
The whole Peter Lynch thing (if you like the popcicle, invest in the popcicle company) can be carried too far.
This country (and Oracle along with it) has been doing very, very well for a number of years. The price of stocks is no longer based on the company itself, but includes a factor that is a bet on the future continuing to be amazing.
Right now, the Asian countries are in a free fall. Pretty much every company in Indonesia is technically bankrupt. South Koreans are being asked to turn in gold to help the country. Imagine what it would be like if these things were happening in the US.
Of course, they are not happening here, but.... Right now, huge containers of beef sit on the docks in Los Angeles, unable to be shipped because letters of credit cannot be obtained from Japanese banks. Right now, cotton farmers are planning to plant only 80% of last years crop, due to lower foreign sales to Asian countries.
These are not "theories" or "guesses." These are things that exist physically, today.
Also, the currencies of Asian countries are in free fall. If you want to go on vacation it will be less expensive over there. But also, US companies will have a harder time competing for sales -- domestic and exports -- with significantly cheaper Asian products.
So here's my perspective: It doesn't matter so much whether the latest release of PL/SQL has 5 bugs or 20. Oracle will fix them. And it doesn't even matter that Oracle is the dominate player, because there is a tremendous premium (froth, excess p/e) in most stocks today. If the near perfect US economy gets shaken (it's bound to happen) then stock prices will fall dramatically.
What's going on in Asia (1/4 of the world economy) is pretty big, yet the news media is only just starting to cover it. If you mention it on this thread people get impatient. People actually believe that we are in a new era and stocks won't really go down. They read advice from Fools, who have little to say other than "Buy and hold" and "Buy on dips."
But like that little company -- APM -- external factors can cause Oracle's stock to soar up and down. When the overall market trends down, buying on dips doesn't work anymore.
But that's just my opinion. And you can bet that if things do really go south, I'll be in there buying Oracle because it's a great company. |
