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Strategies & Market Trends : Gorilla Game Investing in the eWorld -- Ignore unavailable to you. Want to Upgrade?

To: Jill who wrote (981)	12/11/1999 9:55:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 1817

Jill, The valuations junkie in me tells me to be very careful about buying these high-tech high flyers right now. When you're thinking about Siebel, its valuation ratios are in record territory. The PSR is 26 and the PEG (Fool Ratio version) is at 5.5. That last ratio can be a little misleading because there are no published estimates for 2001 yet and I expect 2000 estimates to be raised when the Q4 report card comes out. Even so, Siebel's PEG only very recently got to 2.5 and now it's more than twice that. I realize that Geoff Moore would tell us to forget earnings and look at revenue, but ... If Siebel doubles earnings above this year's current expectations, next year's earnings will be $1.00. Using that unlikely scenario (I doubt their earnings will double) the PEG stands at 2.14. If next yaer Siebel doubles revenues and the stock price goes up 50%, the PSR will come down only to 20. My point is that we're in uncharted territory here, gorilla or no gorilla. --Mike Buckley