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Technology Stocks : Trading TAVA

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To: Josef Svejk who wrote (32)	2/18/1998 7:19:00 PM
From: John Hanzl	Read Replies (2) of 655

Sketpic, One thing I would add in response to "My view is that Y2K will generate earnings for a couple of years but these only deserve a P/E of 1 because they are certain to go away" is that you have to view the Y2K problem through a whole new set of lenses. This problem will grow logarithmically due to the fact that humanity is like a large ship - it takes a large force to change the general path of humanity, but once it has changed it has some some serious momentum. Think of 'flight to quality', but now it becomes 'flight to safety' as investors see the disclaimers in their favorite stock's 10Qs that warn of Y2K expenditures which reduce research capital and EPSs. There will be a paradigm shift that requires us to re-evaluate how we assign multiples in the next couple of years. This will add to the near term investor jitters which in turn will divert revenues into Y2K stocks and away it goes. I think we need to take a good look at human dynamics in order to understand what the future has in 'stock' - pun intended - and maybe tweak the models we use to valuate stocks. JMO, JohnnyH

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