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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: MeDroogies who wrote (15465)	3/3/2001 3:33:31 AM
From: BelowTheCrowd	Read Replies (2) \| Respond to of 19079

Got to disagree with you on the number of companies that will return to the highs we saw in the past year. Note that I'm not speaking of dotcoms (most of which probably won't continue to exist as independent entities, if at all) and instead am focusing on software-related companies. There are MANY, MANY software companies that have come public in the past two years that probably never should have existed in the first place. Sixth, seventh, twentieth, thirtieth entrants into already crowded fields of companies providing some sort of new tool or utility that the internet made you absolutely need, or at least think you need. The reality is that many of these products really had very limited need. Others were neat, but only as part of larger packages. Some of them WON'T exist in two years. Others will be bought up by their competitors for pennies on the dollar. Some will be outdone completely when the larger software companies realize that whatever functionality they provided was a useful feature to include in future releases, thus negating the need for a standalone product. We can see this trend even in the ERP space. When I got into it, circa 1995, 'ERP' equalled 'SAP.' BAAN became a big name later, then PSFT and ORCL. There have been a few others as well, all of which spiked up in the early ERP hysteria and then virtually disappeared. Reality is that BAAN investors will most likely never see the value their stock had at its peak. Invensys is an OK company, but will have to grow tremendously into a market that is now dominated by others in order to regain anything close to the position their acquisition once had. PSFT is also likely to stay down there for a long-long time. Maybe somebody buys them out at a lowball valuation, maybe they just slowly wither away until CA buys them out for the service contract revenue stream. Most of the others won't exist. Same can be seen in CRM. Are the people who bought CLFY, VNTV, RMDY and others at the peak really likely to see those stocks come back? As with all the other areas, this will be true of all the internet-focused software that came out over the past few years. A few winners in each field, with the rest of them thrown by the wayside. The people who hold the winners will eventually see them come back, the others won't. But it'll take a long time. The overvaluation instanity in anything internet related was worse even than the biotech insanity of a decade ago. (Most of those haven't come back either...) All of the above is normal, it's been happening in software for years. The ones that can stick around for decades are the unusual ones. I do believe that ORCL will be in the latter camp. I got out of it a while back because it's valuation (like many others in the market) was just nuts. The recent falls have put it back on my radar screen, which is one of the reasons I'm here. That said, I'm not optimistic about the near term. Stocks often overshoot reasonable values on the declines just as they overshoot on the way up. Hence, I'm cautious and holding back. I've seen good arguements for ORCL falling into the single digits in this environment. These are worst-case scenarios, including assumptions of a deeper recession than I'm expecting, but they are not so crazy as to allow me to discount them outright. I think the next few months will be interesting, although likely frustrating. Best bet is still a move sideways, at least through the summer. mg