PSFT - Fiscal 1998 - Discussion for the next year Message Board

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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year

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Oct 29 5:00 PM EST

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To: Raptor who wrote (195)	3/11/1998 5:20:00 AM
From: Mr Logic	Read Replies (1) of 4509

Raptor I agree with your basic philosophy, being close to a company and investing in it for the long haul. But I think it takes more than that sometimes. Let's say you held no PSFT stock but were in the environment you are in. You think 'this is a great company, I should buy their stock'. Up to here, you and I do the same. But (take PSFT as an example) if the stock price was $10 I would follow my feelings and buy it. If the price was $150 I wouldn't. Two things (at least) are overlaid. Fundamentals and market sentiment. Fundamentals can be great but if the stock is in or out of favour there can easily be a 10x difference in the price making it a great buy or a poor one. The reason I started moving short rather than long - I prefer to be long - was that I became frustrated at the lack of value. I would get exited about a company, but then see too high a price associated with it. So I either put cash on deposit or go short. PSFT has more than doubled in the past year, and looking at the 5 year chart quote.yahoo.com was trading for just a few dollars not so long ago. I think you have to ask yourself the question 'when is this company fully valued?'. Over the past week or two the price has increased $4 or so on no notable news. That's another $1bn of future earnings expectation, just like that. Where does it stop? But if you mortgaged the house to buy just PSFT you have made a great decision, historically. I would have said you shouldn't do that and would have been wrong. I would say you shouldn't stay in that position now. I hope you don't lose out.

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