<What are you trying to say? HYSL should capitalize software?>
I am syaing that invstors that knwo what they are doing should capitalize the software investment expenditures, among other things such as non-capitalized leases, etc.
<The fact that Arbor didn't have any capitalized software on the balance sheet and Hyperion didn't have very much is a positive for investors.>
And how in the world would you come to that conclusion???
<I would guess that when Hyperion Solutions takes a merger charge in the upcoming quarter they will write off all of Hyperion's apitalized software, in order to clean up the balance sheet, although it is already pretty good.>
They will most likely amortize it as an intangible/goodwill.
<Reg, good luck buying stocks with a lot of capitalized software, I don't recommend this strategy, but if it works for you go for it.>
That was the mentality people took with AOL nearly 350% (or about a three years) ago when they tried to capitalize (duly) thier marketing and acquisition expenses. Because of the AOL model, analysts now know how to handle the long term investments of a firm. The moral of the story is, it does not matter what the company does with its financial statments, you as an investor need to know how the mechanics of cash flow and economic value works.
<Secondly, Goldman Sachs IPO has absolutely nothing to do with what their research analysts are going to say about the individual companies that they cover.This is a very respected firm, they are not going to soil their reputation because they are doing an IPO that will "sell itself." >
It will sell itself better in a euphoric market, and it wil be less euporic if GS issues a bunch of sell recomendations (which rarely ever happens believe it or not). I am not downing GS in any way, it is a good company, but they are a bank with the same conflicts as other banks. Just a few short years ago, GS would not underwrite a company that had less than 5 consecutive years of profitability. Look at what they are underwriting now. Companies are not only unprofitable, but don't expect profits for the next few years. Does that mean that thier analysts subscribe to my style of investing (prospective economic cash flow in lieu of increasing accounting earnings) or is it that they are more willing to soil thier reputation now as compared to back then? Just curious. |
