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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: Wei G. Ho who wrote (3218)10/24/1998 12:36:00 AM
From: Marq Spencer  Read Replies (1) of 4509
 
Wei,
There is the "roach theory" that has been followed many of the successful investors. The roach theory states that when you see one, others are likely to follow, and in evaluating company performance, it implies that if there is one bad quarter, more are likely to follow. Or, if there is one piece of bad news (or lowered projections by a company) more are likely to follow. This theory would lead one to watch and wait to see if there are more roaches in the PSFT kitchen.

By the way, there are others who believe that the roach theory relates to analysts - when you see one change the rating, others are likely to follow <ggg>.

What I find most unnerving about PSFT right now, is that PSFT is basically saying that the factors that have caused it to lower expectations are not of limited timeframe - they're implying that they've grown to such a size that from now on the most you can expect is 25%-35% growth. This is quite disturbing since the gorillas grow faster than that even when they're much bigger.

BTW, has anyone noticed that when software companies get to be about a billion in annual revenues, most of them (7 out of 10 or so that have made it there) go through tremendously tough times.

- Brian.
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