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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: Allegoria who wrote (4180)	12/19/2000 5:10:11 PM
From: Mike Buckley	Read Replies (3) \| Respond to of 6974

Eric, Does anyone know if in the history of SEBL earnings they ever noted/acknowledged their hedging strategy in previous quarters? From the 10K: "We manage our foreign currency exchange rate risk by entering into contracts to sell foreign currency at the time a foreign currency receivable is generated. When the foreign currency receivable is collected, the contract is liquidated, thereby converting the foreign currency to US dollars and mitigating the exchange rate risk. In certain instances, we have not hedged foreign currency receivables when the forward contracts in the relevant currency were not readily available or were not cost effective." Mike, since we are not on the G&K thread let me say that IMO SEBL is living proof of the reason LTB&H is good for some of the people some of the time but not all the people all the time. One anecdotal bit of evidence about one stock is not proof of anything. Moreover, any reasonable study of the after-tax benefits of holding stocks for very long periods does prove that the short-term buyer/seller has to far outperform the long-term buyer/seller on a pre-tax basis to achieve the same after-tax results. That's an inescapable function of the results of compounded, retained earnings. If you profess to be so good at achieving those pre-tax results, more power to you. I'm genuinely thrilled for you! I'm not that good. I contend that very, very few people are. By the way, you left out the possibility that LTB&H can be good for some people all of the time. That's the camp I'm in. I appreciate that you disagree Actually, you're wrong. I agree with you that LTB&H isn't for everyone. Neither is eating properly. Nor is exercising. Some people are in great health, living long and happy lives smoking a pack of cigarettes a day. That doesn't mean it's good for everyone to live that sort of life because, clearly, that's very bad for some people. Similarly, noting that a stock such as Siebel has fallen 50%, increased 40% and fallen 30% in only five weeks doesn't prove that short-term investing is more desirable or that long-term investing is less desirable. you don't acknowledge the same justifications on placing investments on macro trends within the huge world/US economy. ... Macro trends - what are these things anyway? It goes along with the old aphorisms of not "fighting the Fed" and "the trend is your friend" and bla bla bla. I'm not sure what your point is. Using those as examples of macro trends, be reminded that those are relatively short periods of time compared with periods of time associated with LTB&H. Thus, those trends are irrelevant to really long-term investors. That's why we ignore them. [LTB&H] is a great option for those without the time or resources to analyze and make decisions about the macro trends in economies, but is appears to be a rather 'blind' option for those that do. Why do you care how others spend their time? If after following my posts on the G&K thread, here, or anywhere, you think I'm "blindly" investing, I don't have a problem with that. My personal anecdotal evidence is that in my attempt at LTB&H, my portfolio has achieved pre-tax returns that have more than doubled the S&P 500 and bettered the Naz by more than 50% during the last 11 years. That's not a really long time in my book. Even so, if I believed I could assuredly do a better job of investing by primarily switching to short-term methods, I would. Knowing that I would HAVE to achieve far superior pre-tax results just to match the after-tax results, it doesn't make any sense to me to try. And if over the next ten years my portfolio only does as well as the broad market or underperforms it a little bit, I don't believe it will be because long-term investing is a deterrant to success; I'll probably come to the conclusion instead that I didn't execute stock-selection methods very well. I might note that due to this emphasis on international, SEBL immediately incurs investors worries about international currency trades, i.e. strong dollar, overseas economies, hedging and the like. You'd rather invest in a company whose market is limited to dollar-denominated sales? I prefer the mass markets the entire world has to offer. Will they be caught with their pants down as many other big companies have in the past? Probably. (But let's not infer that small companies are immune to being caught with their pants down.) Over a long period of time, it's unreasonable to think that management won't occasionally screw up. One reason the price of Siebel's stock tends to be in the stratopheric range is because management hasn't screwed up. Yet. --Mike Buckley