Softcash,
<If you have invested only on PEs you would have missed out on the greatest BULL market the world has ever seen! You should have tossed out PES several years ago.>
Duh. I rode the great tech bull. Ride has been a little rough since April. Got off 4 weeks ago to rest. Saddle sores. One called MANU. Another called PSFT. A third called ITWO. There was a warning message there.
<Major case in point: the internet stocks. These stocks aren't even
making any money and they are trading very well - perhaps the best growth in price of any stock!?!>
Duh again. You won't find these on my shorts list either. Neither is BEAS for that matter. It is trading in a range where I consider it fairly valued, including its growth projections.
The internet stocks are behaving just like bio-tech stocks in the very early 90's. Were you watching them then? I wouldn't put BEAS in this class, although I wish it had been successful at inclusion in this club while I held 40,000 shares of it.
<Especially while consumer sediment is still very strong. People are still dumping lots of money into the market.>
Sediment... a rather appropriate slip. For every buyer there is a willing seller. Keep dumping it into the techs on my shorts list and someone else will keep taking it. If you look at the overall performance of the stocks on my shorts list they have quite dramatically underperformed the market since April. Yes, some are still holding up, but not for long. Even IBM is at what I would consider a peak. I don't expect to see it rise above this level and sustain til after 2000.
Now for BEAS --
I love Bill Coleman, his company and his idea, but he ain't Yahoo. He is more akin to Computer Associates. They'll be fine and the investors over the long run will be too. If you want to accumulate this, fine. All I'm saying is that you'll have more buy opportunities at or below $16. I'm sorry to see it headed there, but it is headed there. In June I said that I expected to see them valued between 30-60x earnings. Use the .36 if you want. Well that puts them in the $10.8 to 21.6 range now doesn't it. If it breaks out above $21 and sustains there I'll believe some true magic is happening, but for now, they have a veteran management team, managing largely to plan and an analyst community that seems to be in sync. That is predictability. Look at ORCL or SUNW to see how good numbers and predictability have been valued lately. Don't start to tell me about DELL. They aren't on my shorts list yet either and I can read.
As for the 'reiterate buy' stuff. We have been seeing these kinds of comments every quarter for the last three from one or another of the analysts following BEAS, typically when it hits the 'unthinkable' lows. Last quarter it was around $18. This quarter $16.5. Stock runs up a bit on the news, then resumes former levels. I don't really think any of the analyst firms is comfortable that they AREN'T behaving like Yahoo, and they can't understand why. Its middleware and it supports net applications -- why isn't it going great guns?
They have clients to protect. They were probably still putting lots of people into this thing over $20. Good long term, not good this year. I'd like to see it at $29.5 too. I'm not short! (but a lot of people are -- check the short interest)
And yes, the market is starting to pay more attention to company valuations, whether you like it or not.
ttf
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