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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (42665)	4/2/2001 9:09:21 PM
From: Prognosticator	Respond to of 64865

Thanks for your reply, it's so nice to have an intelligent discussion about valuation on this thread for a change. You do have an interesting dichotomy in your use of the 30-year funds, 7-year horizon, all of which is much longer than short-term traders who tend to think in terms of not holding an open position past the end of the day. The 'get your money back after 7 years' is also an interesting assumption: doesn't that mean that after 7 years, book value for the stock will be at the $3.13+$4.80 = $7.93 that your calculation yields. If so, then the currently low Price/Book Ratio implies that 7 years from now, the stock will be at $7.93x4.66 = $36.95, which still makes SUNW a better investment than a 30 year bond even allowing for risk premium. We can continue the discussion when I see your formula, and what assumptions it represents. IMNSH opinion SUNW is already at a fundamental bottom, but it may not be the global bottom. I called a bottom at $18, so far we're off 20% since then, the only absolute bottom which can be guaranteed for any stock is $0. That hasn't stopped me investing more of my capital in this fine business at these heavily discounted rates. May those who disagree with my assessment keep their money warm under the mattress. P.

To: Wayners who wrote (42665)	4/2/2001 10:24:46 PM
From: Charles Tutt	Read Replies (2) \| Respond to of 64865

FWIW, I'd probably be more inclined to look at it as an annuity rather than use a 7 year horizon. But fundamental value has little to do with stock prices these days, anyway. You might be better off studying psychology and sociology. JMHO. Charles Tutt (TM)

To: Wayners who wrote (42665)	4/3/2001 12:07:30 AM
From: chic_hearne	Read Replies (2) \| Respond to of 64865

Wayne, I like your style of valuation. Wall Street ANALysts haven't used these kinds of valuation models since the late '80's. But I believe history will repeat and we will return to them. One area I think is flawed is the future growth assumption you made. Flawed may be the wrong way to put it, saying "what will happen in the future is uncertain" would be a better way to put it. You made an assumption, but I think the beginning of a recession/depression (???) is the wrong time for assumptions. Frankly, we all have no idea how this will play out. I think the economy is headed for a severe depression, others still think a second half recovery is going to happen, then we have the vast majority somewhere in the middle. For the long term players, I think now is the wrong time to be placing bets. If you're talking about a 5-10 year investment, why the rush to get in? Why not wait 3-6 months (???) and wait to see what develops in the economy? JMHO chic