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Technology Stocks : ATI Technologies in 1997 (T.ATY) -- Ignore unavailable to you. Want to Upgrade?

To: Harry Stein who wrote (5047)	2/5/2000 8:39:00 PM
From: SBHX	Read Replies (1) \| Respond to of 5927

Harry, I'm going to lose this argument since the stocks in the explosive areas are going to continue to go up, but I'll make a valiant attempt to reason against a howling wind of insanity that is going on around us. The wireless stocks are going to make me look stupid just as the internuts did, but I don't really mind being a fool. In fact, this time, I have played along with this crazy bubble and started to put bigger piles of money into some of these crazy pyramid schemes --- I'm not going to say anything against the ones I hold in case I jinx them, but I'm a firm believer of the bigger fool theory (BFT) --- some BF is going to come in and pay even more money for these stocks I own that I paid way too much for. I'll join in the dance as long as I make sure I'm not holding the bag when things go bad. But there is a stock I missed out on and one I have recently got out of. I'll just pick on them since I have nothing to lose there. :) I'll leave out the names, but if you were in wireless, you'll know who they are. I won't even consider earnings. 1. This recent very successful IPO was offered at $11-$18, currently trades at C$135 or us$94. Revenue 12 months Sep99 = $829K. REVENUE next yr is estimated at $4M. Total market cap Feb4,2000 is 3.326B. Do the math, P/Revenue this yr is 4012. P/Revenue 2000 is 831. 2. This early pioneer of wireless email devices recently sold 2000 wireless email-pagers to intel for about $700K. Their market cap rose by 700M in one day. Sales in 9 months from 02/99 to 11/99 was C$87M = us$60M, an annual rate of us$80M. Market cap Feb4,2000 is 6B. P/R= 75. ATYT's numbers are : Market cap = us$2.4B Sales (last 12 months) = 1.32B. P/R = 1.8. -- In the old days, companies raised cash by going public and investors get paid dividends that are supposed to beat the rate of deposits. Back then, this is actually how people were supposed to make a return by lending money to corporations at risk. Later, stock prices have little to do with dividends and really depends on what people are willing to pay for them. Nowadays, things have gotten even more out of whack. We don't make money by owning the stock, we make them by selling them to bigger fools (BFs) at higher prices, while we (having caught the gambling bug, no way can we live with just interest and miss out on all the excitement, the rush when your stock goes up by 25% in one day is better than warm apple pie), have to continually hunt for stocks to buy at exorbitant prices, becoming BFs, while hoping that even BFs will come along to buy these things off our hands. Now consider this for a moment. Take the internuts and the wireless companies. The value of the trades in stocks of these companies are >> the sales they do all year. I'll take eg#2, the avg vol is 1.26M, The vol in nasdaq+tse is 900K on Feb4th. The value of the trades is 900K93 = 84M. This is bigger than the revenue that this company made in the last 12 months. So which is the real economy? The trading of this stock or the product that it makes? Is the wireless market going to be huge? Yes. Do I believe someday there'll be 500M of these things sold in a year? Yes. Are people investing in wireless rationally with a reasonable 2-3 yr horizon? No way. The ones buying these things today who know what they're doing are big believers in the BF theory. The others who go in blind might be casting dice at very very hot roulette tables. ---- I agree with you. It would be nice if ATYT were to announce a wireless product, but I'd be really worried about all the kachings* that I would rake in if that happened. :) Sometime in the future, people are going to be looking back and talking about the Biggest Fool Theory, which is really about the last guys holding the bags when the dance stopped, while the rest of us sneak out of the dance halls with big grins on our faces. Sure hope it's not me that's holding the bag.

To: Harry Stein who wrote (5047)	2/6/2000 1:14:00 AM
From: Smacs	Read Replies (1) \| Respond to of 5927

Get into wireless!? I'm sorry, but that's ridiculous! You can't just say, "Oh, you're a successful company who is number one in your industry...unfortunately your P/E is only considered normal (21 vs. 521) so we as investors think you should change industries!" While we're at it, why don't we suggest that Home Depot "go wireless"? I've got a fundamentally great hold in Patheon, and it hasn't gone up much lately...sure they're a Biotech/Pharma supplier, but I think a stab at wireless would do wonders for the stock price! Please pardon my sardonic tone, but you can't (easily) predict who the market darlings are going to be. Those are the companies that get outrageous valuations; the rest have to actually be good at what they do. If you're LONG in ATI, you're long because they are the number one graphics card supplier in their industry with interesting new products in areas that "make sense" given their expertise. Let's be patient and let the market "find them" when they're ready. In the meantime, listen to the analysts and ACCUMULATE. -sm-