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Technology Stocks : Gateway (GTW)
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To: Skeeter Bug who wrote (6483)8/13/1998 3:36:00 PM
From: Kory  Read Replies (1) of 8002
 
I agree with basically everything you've said with one exception.

That being the 6% growth rate. I agree that if GTW's growth rate remains that or even drops below that (as most have), the stock appears very overpriced.

And I would agree with you that what the market believes is that GTW will exceed significantly that growth rate going forward.

The next 12 to 24 months Gateway very well may struggle and show even negative growth rates (well, I hope not for Q3 considering what happened last year). If so, the stock will likely take a beating. On the other hand if Yourware and the-oft-hated-here Country Store concept help GTW increase margins, being a short may be painful.

In either case, I really don't worry to much. If the stock stays up where its at or goes higher, I will likely just hold my position and maybe add a little as the industry conditions become clearer. If the stock tanks, I will buy more at lower prices and wait for what I believe will be an eventual recovery of the industry.

A relatively small fraction of the world (and a minority in the US) own computers. I still like the industry even if a shakeout happens. And I personally believe that GTW will be among the ones standing at the end because the give good value and service for the money.

I like your posts, and for a trader, the arguments are better than most I have heard. I guess I just look at the company and industry over a longer time frame.

Best of luck,

Kory
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