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To: Richard Tsang who wrote (12658)	12/4/1999 10:10:00 AM
From: Dale Baker	Read Replies (1) \| Respond to of 118717

I certainly plan to cut back next spring and maybe sit out October completely. This year I could have sold out in May and bought back in November without missing any upticks in the portfolio. I drifted in a +40% to +65% range that whole time. Then the November rocket took off and the rest is history. I mentioned FORTY not long ago as a recommendation from a good friend. Now it shows up in a newsletter from an SI poster that I just started getting. This may go on my Monday buy list. From: "DAVID A. BANISTER" <dbanister@home.com> \| Block address To: "SMRM" <SMRM@onelist.com> Date: Sat, 4 Dec 1999 09:47:30 -0500 Reply-to: SMRM-owner@onelist.com Subject: [SMRM] STOCK MARKET RANDOM MUSINGS NEW STOCK PICK SAT 12-4-99!! Well, we had a fun week counting profits in the Nasdaq, MGIC soared to nearly 69 from 42 early in week on news of 3 for 1 split and related excitement and buzz. I sold some of my shares at 65 1/8 yesterday in order to re-invest in a new lower undervalued company that I think will triple in 3 months, but that is not for this edition of SMRM. NEW SMRM STOCK PICK!!!! Ok, now that I have your attention.... the last official SMRM pick was WPNE at 8 7/8 on 11-5 and it has more than doubled to 19 per share in 4 weeks. WPNE will continue higher and see $30 soon.... MGIC has returned 500% since SMRM picked it in May.... now this company Im about to talk about is dramatically undervalued...I mean ridiculously undervalued. If anyone in America knew about them in the market we are in here, this stock would go from $37 to probably $200 per share, no joke. Some of you may be aware that there is a growing technology boom outside these U.S. shores... its called Israel. Yeah, tons of high tech firms are up and comers out of that country...its the Silicon Valley of the region. Therefore, there are lots of gems (ala Magic) that are over there and undiscovered (did I mention Magic at 10??).... I have been doing some digging and after some due diligence, I can't believe this company's shares are being given away for $37-$38 per share.... Lets talk about the facts.... what if you found a High Technology company, that has a Venture Capital arm with holdings in over 9 private software and information technology firms, and also holds current stakes in 10 publicly traded companies (including an 800,000 share stake in MAGIC which is now worth $48 million and they invested for only $4 million back in March 98), and has recent revenue growth of 40% this year through the first 9 months. (Sounds like CMGI a bit huh??)... Wait it gets better, they are the largest publicly held Software and Information Technology Holding Company in Israel, with 3500 employees with all their ventures and arms. They have $151 million in cash and short term investments (probably understated), very little debt, operating margins that recently went from 37% to 42%, Blue Chip customers around the world, and Revenues have grown from 27 million in 1994 to probably what will be 330 million in 1999!!! But no, its even better!!! The whole company is valued in its entirety at only $350 million US dollars!!! Thats about 1 times this years revenues!!!! So lets see if I get this straight.... I am buying the entire operations (which include e-commerce, telecommunications, Information Technology (where spending will explode in 2000), Software consulting, venture arms public and private.... for $38 per share, and $16 of that is cash????? So Im really buying the whole operating company and all its ventures for $22 per share net, since $16 of my $38 is in cash per share.... thats the whole company valued at $203 million for the operations end. Lets do some math, in the US this should trade at more like 10 times sales and 50-70 times earnings perhaps. This stock could go to $150 per share from $37 and still be only 1.5 billion valuation, less than 5 times sales, and still only 40 times earnings..... again, there are Internet infrastructure firms going public at 5 billion market values with nothing close to this!!! This is where the money is made in the market people, finding the gems like this undiscovered by the investing public... finding the MAGICS and AREMisofts of the world, that go up 200-500% and still nobody knows who they are.... better yet, finding small caps that are actually profitable (horrors!) and cheap relative to sales and balance sheet!! The name of this company is FORMULA SYSTEMS (FORTY).... the stock price is about $38 per share... my target is $150 per share end of 2000 fair value. This is an official SMRM pick and will be on the spreadsheets tracking its progress going forward. It has recently balooned from 25 to 38.... but its still very cheap.... those who have read my SMRM for awhile are probably comfortable with my recommendations.... but do some checking first, dont just leap to buy because I like it... heck I could be wrong (lol).... Data on the numbers, book value, profit margins, return on equity etc... biz.yahoo.com and here is their latest quarterly earnings... biz.yahoo.com And, here is list of companies they own shares-investments in or operate formulasystems.com