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Gold/Mining/Energy : GEAC.....Canadian best kept secret -- Ignore unavailable to you. Want to Upgrade?

To: micromike who wrote (1327)	7/17/2000 12:29:41 AM
From: Jack Jagernauth	Respond to of 1571

What's a soft sector syndrome? I made that up :) To me, it means having a perfect excuse for poor results. I know that software people are in high demand; I also know that they are not likely to stick around working in situations with declining prospects, regardless of the compensation package. The reality is, Mike, the stock has been taking a beating, which will probably continue in the near-term. I am long and I am in no hurry; however, I feel it's best to face up to reality, and look at things objectively...both pros and cons.

To: micromike who wrote (1327)	7/17/2000 1:24:33 PM
From: Doug	Read Replies (2) \| Respond to of 1571

Mike: GEAC's strategy of integrating specialized sectors would have made sense if a: They bought assets using Stock as Collateral and the stock had a P/S of more than 3 to 4. b: The Operational earnings were consistently +ve. c: The debt was near nil. Instead they borrow from the bank at +6% , ,make xpensive acquisitions like JDA and end up making a loss for 3-4 Q's. This business model is flawed. The primary objective of any buisness is Operational earnings; every thing else is subordinate to that. If they are willing to buy Companies for a P/S exceeding 0.75, it would be better if they bought their own stock since its P/S is now less than 0.65. What is the logic of making an acquisition whose P/S is higher than yours.?