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Technology Stocks : PC Sector Round Table

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To: Yogi - Paul who wrote (1303)	12/15/1998 8:50:00 PM
From: Frodo Baxter	Read Replies (4) of 2025

Sure, sure, owning the CSCOs and GEs of the world seem like a smart bet, but is what's true yesterday true tomorrow? Valuation models change. Times change. The mega-caps look especially nifty-ish, don't they? Dell's book value is less than a couple bucks. Microsoft has stock option overhang in the billions. GE's biggest arm is finance, and look how volatile finance is (Goldman's quarter is down 80%). Not that the speculative small stocks are any better. Mark likes Lernout and Hauspie? Led by Gaston Bastiaens? The same character who drove Quarterdeck to the ground because of an overly-aggressive expansion strategy? And running the same m.o. at LHSPF? Please. And y'all think the savior for the dismal economics of capitalism is the Internet? Which makes businesses more efficient? More frictionless? That lowers the barriers to entry? Not quite. Competition will only become more perfect, margins will come under more pressure, and the only way to make a buck is productivity growth, transient competitive advantages that don't even last a damn product cycle. Be afraid. Be paranoid. Because in the end, valuations matter. Business is pain. APM will go bankrupt. And hubris kills.

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