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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year
PSFT 0.00010000.0%Oct 29 5:00 PM EST
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To: Rick who wrote (368)3/31/1998 1:23:00 PM
From: Chuzzlewit  Read Replies (2) of 4509
 
Rick, two points:

First, you cannot talk about a potential merger as either accretive to earnings or where the stock of the acquirer will end up without knowing the details of the deal. The reason is that accretive is always calculated on a per share basis. [We can fight about this one if you like, but you'll lose <VBG!>]

Second, regarding the "gorilla":
Before you totally condemn the book (and I'm not speaking in favor of the ideas presented) you need to understand two things. First, the book is intended as a strategy for hi-tech investing only. Companies like Boston Chicken would never be considered. Second, the authors take the approach that the best starting point is to identify an emerging technology (rather than an emerging company) that is expected to grow very rapidly (so companies like SEG etc. would be excluded). Then, instead of investing in one company that you believe will be the big winner in that industry you invest in a basket of companies that you expect will contain the ultimate winner. As time goes by, you winnow that list and invest more in the company(s) that are left. Ultimately you will be invested 100% in the "gorilla" (as in 500 lb. gorilla).

Now, before you jump all over me, I'm not endorsing the idea, or even suggesting it's workable. All that I'm saying is that it's an interesting twist.

Regards,

Paul
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