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Technology Stocks : Enterprise Resource Planning & Supply Chain Management -- Ignore unavailable to you. Want to Upgrade?

To: bob zagorin who wrote (11)	1/25/2001 12:46:50 PM
From: Thomas DeGagne	Respond to of 54

Here is a good post on Geac: Message 15242103 I also had a great post to you yesterday but my cable connection gave out and stayed down all day. I'm switching to ADSL now. I saved the post and I'll send it shortly.

To: bob zagorin who wrote (11)	1/25/2001 1:47:46 PM
From: Thomas DeGagne	Read Replies (1) \| Respond to of 54

I believe the vast majority of analysts are too focused on the past and lack sufficient understanding of the technology industry to visualize the future. Almost every forecast I see is strictly linear: inflection points where companies experience non linear growth are generally missed. New product releases and mergers are two examples of inflection points for which there is a wealth of information and very poor analysis. Analysts always believe that a merger will instantly transform the combined companies and often grow frustrated six months later. That's when I buy. What really amazes me is that there appears to be a fear of SW product releases in the investment community. Irrational exuberance is displayed before a product is available followed by a fear that no one will buy it. I believe that for complex SW products (ERP, DBMS, CAD, programming tools) there are two phases to new product adoption. First sales of the old product version fall due to discounting and purchase delays. Many customers defer purchases until the new release is available. This results in an earnings disappointment with lower license revenues. Analysts then downgrade the company. This is when you buy the stock. The next phase is a large sequential increase in revenues when early adopters buy the new release. There are usually incentives to upgrade offered by the companies as well. Profits soar and analysts upgrade the company. Using this method I have done very well with SW companies.