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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: David Harker who wrote (5377)	7/7/1999 3:17:00 PM
From: Proud_Infidel	Respond to of 8218

One inch no cinch for IBM storage gurus eetimes.com

To: David Harker who wrote (5377)	7/7/1999 5:32:00 PM
From: Arrow Hd.	Read Replies (1) \| Respond to of 8218

A strategy like yours can work very well if you put the time in to monitor the stock and then have the conviction to pull the trigger which it appears you have been doing successfully. I think there will be more swings this year so I would not stay on the side lines until next year. I think the second quarter came in well and we could get another short term move through early August. Then, as I have posted in the past, I would take a hard look at cash for the Fall period. Y2K will cause companies to freeze data centers to some degree to insure as best as possible their readiness status. But there are solutions to these issues. Mainframe upgrades are mostly microcode controlled today so the latent capacity exists in the machines to be turned on non-disruptively. IBM can make Mainframe revenues with out ever shipping anything but media loaded with microcode instructions. When engines are turned on it increases software charges which are aligned with MIPs via functional pricing and it increases maintenance agreement charges at some point when the upgrade warranty expires. So there are residual revenue streams that are increasing each month even when no actual hardware is shipping from the plant. These models are not understood by analysts who then continue to under-estimate business area performances. So there can be some upside surprises in the mix come this Fall that may mitigate some of the Y2K issues but the timing is key. I would be an owner each quarter just before earnings since the negatives will be factored in and the positives may not be recognized leaving an upside surprise a distinct possibility. Just some thoughts and opinions. Nothing scientific here.