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Non-Tech : Charles Schwab (SCH) -- A tech-stock profile? -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (718)	6/15/1999 4:22:00 PM
From: Tommaso	Read Replies (1) \| Respond to of 1390

Skeets, the remarkable thing is that anyone who was holding Schwab a year ago is still sitting on about 400% gains. I would be the first to agree that I am extremely envious of anyone in that position, because it is a very rare opportunity to lock in a once-in-a-lifetime windfall by selling and putting the money in the bank. Even more remarkable, however, is the capacity for persons who have seen a stock at much higher values to go on holding it in hopes that it will return to those even more unrealistic values. I fought this battle with my parents in 1969 or so. They had 25% of their entire net work tied up in Polaroid at about $145 a share. They refused to sell. When I finally persuaded them to get out, it had sunk to about 90, but thank God they did, because it subsequently went as low as about 17. In retrospect, it was obvious that Polaroid never could have been worth $145, even though it had a monopoly on the instant-picture market. At that time there was speculation of world-wide boom in their business that justified a very high multiple. Schwab doesn't even have a monopoly, and it appears that their business has enjoyed a sudden burst of activity that is now subsiding.

To: Skeeter Bug who wrote (718)	6/15/1999 4:23:00 PM
From: Kayaker	Read Replies (1) \| Respond to of 1390

Customer assets at Schwab were $560.7 billion as of month-end May, down less than 1% from April 1999 and up 36% from May 1998. seems customer assets are down even though net new assets are up. sounds like word games to shelter the disaster. You lost me. What's the word game here? What's the disaster?

To: Skeeter Bug who wrote (718)	6/15/1999 6:37:00 PM
From: Richard Forsythe	Read Replies (3) \| Respond to of 1390

Customer assets are down because the market is down. That's what happens sometimes when you own equity. If you don't want it to happen, buy a CD. The total asset number is a rough proxy for the level of the market as a whole. Net new assets happen because more people open accounts and/or transfer money TO Schwab than close accounts and/or transfer money OUT of Schwab. For May it was $8.6bn, April it was $5.7bn and for the first quarter it was $28bn. This compares to last year, when the numbers were 7.1, 4 and $21bn respectively. So, not only do you have sequential growth in new assets (5.7 -> 8.6), but also year on year growth (7.1 -> 8.6). If they take in 7.5bn this month, that would put them on 21.8bn for the quarter, or about 25% over last year. These are incredible results for such a large company. As to stock valuation, it was clearly pricey at $157. Is it pricey at $82? I don't know. But the company is not hitting a wall -- it's still growing at a fast clip. Richard