Ahoy there.
Everyone has to decide for themselves.
I certainly made myself clear about this and other Y2K stocks, and in no uncertain terms. Sorry I didn't go to the thread. But it was such an obvious waste of time to me, that I didn't even think of it.
TM had his completely invalid reasons for thinking well of this stock. He gave them. Caveat emptor.
The worst decisions are when the unknowledgable, leading the utterly clueless form a coalition. The utterly clueless have a responsibility there also.
In software, I would look for depth in a down market. Does the company have reserves? Does it have staying power? Does it have good products? Does it have a good sales organization? Does the company retain their engineers? Is turnover a problem?
In an up market, look for horseshit and hype, and follow the smell.
Software is really a couple of markets.
1. Business - Packages for business.
Business - Custom software for business.
Both of these are mostly one, since the packages often just get you in the door to do the customization.
Custom software is a tough gig. Not inherently, but it tends to be run by people with sales and finance skills who are blithering when it comes to technology. I kid you not about the blithering part. God knows how many times I have run into software execs without any fucking clue at all. I remember the former CEO before we got acquired. I talked to him for literally 2 minutes, the guy's eyes quite literally started crossing, and his head bobbed.
Software in an industry dominated by executives who cannot drive the product. Imagine Lee Iacocca - never driven a car, never will. Can't figure it out. That's the software industry.
So small wonder companies from EDS to the "Big Eight" accounting firms have had such a string of failures. (It's a secret. They hush them up with settlements. But it costs money.) This mismanagement and stupidity is the primary reason for this industry not being highly profitable.
2. Packages - Consumer
Off the shelf stuff. This business depends on functionality, hype and revision to keep the income stream. With hype and revision dominating. So does Microsoft dominate. They live on speed, and cutting to the point that it barely gets out the door at all with a minimum of bugs. Most of this software is pretty dead simple in concept.
Web apps? Those are a variety of number 1.
That pretty much is it in a nutshell.
Y2K was and is a hype in search of a market. These companies were cooked up by marketroids who don't know shit from chipped beef.
So anyway - educate yourself. Investing heavily in an industry you have not got a clue about is a darn good way to get burned. Seems to me like both you and TM got seared but good. I have too. It happens. Take your lumps and learn what you did wrong.
Maybe I should write a newsletter on software companies. Hmm. I'd probably end up getting sued for libel for telling the truth. ;-) |
