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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?


To: techguerrilla who wrote (8027)10/11/2002 12:50:36 AM
From: Mannie  Read Replies (4) | Respond to of 89467
 
Did you listen to Robert Byrd's speech tonight?
It was a masterpiece.
Put that man in the same category as the founders of this country.
He is a jewel.
W is a dangerous puppet.

scott



To: techguerrilla who wrote (8027)10/11/2002 3:22:59 AM
From: Raymond Duray  Respond to of 89467
 
I'd compare Bush to pond scum. But that would be unfair to scum.....

Message 18100754

"A lesson in business ethics from George Bush? That's like getting a facial from a leper." --Robin Williams



To: techguerrilla who wrote (8027)10/11/2002 4:57:46 AM
From: stockman_scott  Respond to of 89467
 
War for Dummies

By Michael Kinsley
Columnist
The Washington Post
Friday, October 11, 2002

According to the Bush administration, the threat posed by Iraq is serious enough to risk the lives of American soldiers, to end the lives of what would undoubtedly be thousands of Iraqi soldiers and civilians, and to risk a chemical or biological attack on the American homeland, but not serious enough to interrupt prime-time television. None of the big three broadcast networks carried President Bush's case-for-war speech Monday night because, they say, the White House didn't ask. Preempting Saddam Hussein is one thing, apparently, but preempting Drew Carey is another.

The Post reports that "the White House said it did not put in the usual formal request because it wanted to keep the American public from thinking we were going to war." As the hour for the speech approached, The Post says, White House officials had second thoughts and offered to "beef up" the speech to entice the networks, but it was too late.

This notion that a call to arms can be beefed up or beefed down at will, like the idea that people should give their support for a war without really thinking it's going to happen, is characteristic of the Bush sell job. Foreigners, the New York Times reports, read Bush's speech as backing down from an inexorable commitment to "regime change," while in America it was seen as his toughest statement yet. Whatever.

Ambiguity has its place in dealings among nations, and so does a bit of studied irrationality. Sending mixed signals and leaving the enemy uncertain what you might do next are valid tactics. But the cloud of confusion that surrounds Bush's Iraq policy is not tactical. It's the real thing. And the dissembling is aimed at the American citizenry, not at Saddam Hussein. Hussein knows how close he is or isn't to a usable nuclear bomb -- we're the ones who are expected to take Bush's word for it.

"Iraq could decide on any given day" to give biological or chemical weapons to terrorists for use against the United States, Bush said Monday night. The wording is cleverly designed to imply more than it actually says. It doesn't say an Iraq-sponsored biological attack could actually happen tomorrow. But the only purpose of the phrase "on any given day" is to suggest that it might.

So the question then arises: If Saddam Hussein has the desire and ability to attack the United States with chemical and biological weapons, either directly or using surrogates, why hasn't he done so? Possibly because he fears reprisal. Bush's emphasis on the danger of Hussein's giving these weapons to terrorists, rather than his using them himself, was another bit of careful wording, intended to suggest that Hussein could avoid reprisal by leaving no fingerprints. But Hussein surely realizes that evidence will be found linking him to any terrorist act for the foreseeable future, whether such evidence exists or not. Meanwhile, though, if the United States is inexorably committed to "regime change" -- which, in any scenario, Hussein is unlikely to survive in one piece -- any reason for him to show restraint disappears.

The CIA makes this obvious point in a document made public this week. The agency's assessment is that Iraq is unlikely to use biological or chemical weapons against the United States unless we attack Iraq and Saddam Hussein concludes he has nothing to lose. The administration disagrees, naturally. Whatever small basis either side may have for its conclusion, we who must follow the dispute in the papers have even less. Who knows who's right? But Bush cannot have it both ways. He cannot insist that Hussein is able and eager to do so much harm to the United States that we must go to war to remove him, and at the same time refuse to acknowledge the increased risk of such harm as one of the costs of going to war.

The Bush campaign for war against Iraq has been insulting to American citizens, not just because it has been dishonest but because it has been unserious. A lie is insulting; an obvious lie is doubly insulting. Arguments that stumble into each other like drunks are not serious. Washington is abuzz with the "real reason" this or that subgroup of the administration wants this war.

A serious and respectful effort to rally the citizenry would offer the real reasons, would base the conclusion on the evidence rather than vice versa, would admit to the ambiguities and uncertainties, would be frank about the potential cost. A serious effort to take the nation into war would not hesitate to interrupt people while they're watching a sitcom.

But citizens ought to be more serious too. They tell pollsters they favor the Bush policy, then they say they favor conditions such as U.N. approval that are not part of the Bush policy. Many, in polls, seem to make a distinction between war, which they favor, and casualties, which they don't. Neither side in this argument has an open-and-shut case, and certainly agreeing with the president's case doesn't make you a fool. Agreeing with the president even though you didn't hear his case -- because he apparently didn't much care if you heard it -- is a different story.

© 2002 The Washington Post Company

washingtonpost.com



To: techguerrilla who wrote (8027)10/11/2002 6:42:01 AM
From: stockman_scott  Respond to of 89467
 
Opposing the Use of Military Force Against Iraq

Comments By Rep. Ron Paul (R-TX)

October 10, 2002

I oppose the resolution authorizing military force against Iraq. The wisdom of the war is one issue, but the process and the philosophy behind our foreign policy are important issues as well. But I have come to the conclusion that I see no threat to our national security. There is no convincing evidence that Iraq is capable of threatening the security of this country, and, therefore, very little reason, if any, to pursue a war.

But I am very interested also in the process that we are pursuing. This is not a resolution to declare war. We know that. This is a resolution that does something much different. This resolution transfers the responsibility, the authority, and the power of the Congress to the President so he can declare war when and if he wants to. He has not even indicated that he wants to go to war or has to go to war; but he will make the full decision, not the Congress, not the people through the Congress of this country in that manner.

It does something else, though. One-half of the resolution delivers this power to the President, but it also instructs him to enforce U.N. resolutions. I happen to think I would rather listen to the President when he talks about unilateralism and national security interests, than accept this responsibility to follow all of the rules and the dictates of the United Nations. That is what this resolution does. It instructs him to follow all of the resolutions.

But an important aspect of the philosophy and the policy we are endorsing here is the preemption doctrine. This should not be passed off lightly. It has been done to some degree in the past, but never been put into law that we will preemptively strike another nation that has not attacked us. No matter what the arguments may be, this policy is new; and it will have ramifications for our future, and it will have ramifications for the future of the world because other countries will adopt this same philosophy.

I also want to mention very briefly something that has essentially never been brought up. For more than a thousand years there has been a doctrine and Christian definition of what a just war is all about. I think this effort and this plan to go to war comes up short of that doctrine. First, it says that there has to be an act of aggression; and there has not been an act of aggression against the United States. We are 6,000 miles from their shores.

Also, it says that all efforts at negotiations must be exhausted. I do not believe that is the case. It seems to me like the opposition, the enemy, right now is begging for more negotiations.

Also, the Christian doctrine says that the proper authority must be responsible for initiating the war. I do not believe that proper authority can be transferred to the President nor to the United Nations.

But a very practical reason why I have a great deal of reservations has to do with the issue of no-win wars that we have been involved in for so long. Once we give up our responsibilities from here in the House and the Senate to make these decisions, it seems that we depend on the United Nations for our instructions; and that is why, as a Member earlier indicated, essentially we are already at war. That is correct. We are still in the Persian Gulf War. We have been bombing for 12 years, and the reason President Bush, Sr., did not go all the way? He said the U.N. did not give him permission to.

My argument is when we go to war through the back door, we are more likely to have the wars last longer and not have resolution of the wars, such as we had in Korea and Vietnam. We ought to consider this very seriously.

Also it is said we are wrong about the act of aggression, there has been an act of aggression against us because Saddam Hussein has shot at our airplanes. The fact that he has missed every single airplane for 12 years, and tens of thousands of sorties have been flown, indicates the strength of our enemy, an impoverished, Third World nation that does not have an air force, anti-aircraft weapons, or a navy.

But the indication is because he shot at us, therefore, it is an act of aggression. However, what is cited as the reason for us flying over the no-fly zone comes from U.N. Resolution 688, which instructs us and all the nations to contribute to humanitarian relief in the Kurdish and the Shiite areas. It says nothing about no-fly zones, and it says nothing about bombing missions over Iraq.

So to declare that we have been attacked, I do not believe for a minute that this fulfills the requirement that we are retaliating against aggression by this country. There is a need for us to assume responsibility for the declaration of war, and also to prepare the American people for the taxes that will be raised and the possibility of a military draft which may well come.

I must oppose this resolution, which regardless of what many have tried to claim will lead us into war with Iraq. This resolution is not a declaration of war, however, and that is an important point: this resolution transfers the Constitutionally-mandated Congressional authority to declare wars to the executive branch. This resolution tells the president that he alone has the authority to determine when, where, why, and how war will be declared. It merely asks the president to pay us a courtesy call a couple of days after the bombing starts to let us know what is going on. This is exactly what our Founding Fathers cautioned against when crafting our form of government: most had just left behind a monarchy where the power to declare war rested in one individual. It is this they most wished to avoid.

As James Madison wrote in 1798, "The Constitution supposes what the history of all governments demonstrates, that the executive is the branch of power most interested in war, and most prone to it. It has, accordingly, with studied care, vested the question of war in the legislature."

Some- even some in this body- have claimed that this Constitutional requirement is an anachronism, and that those who insist on following the founding legal document of this country are just being frivolous. I could not disagree more.

Mr. Speaker, for the more than one dozen years I have spent as a federal legislator I have taken a particular interest in foreign affairs and especially the politics of the Middle East. From my seat on the international relations committee I have had the opportunity to review dozens of documents and to sit through numerous hearings and mark-up sessions regarding the issues of both Iraq and international terrorism.

Back in 1997 and 1998 I publicly spoke out against the actions of the Clinton Administration, which I believed was moving us once again toward war with Iraq. I believe the genesis of our current policy was unfortunately being set at that time. Indeed, many of the same voices who then demanded that the Clinton Administration attack Iraq are now demanding that the Bush Administration attack Iraq. It is unfortunate that these individuals are using the tragedy of September 11, 2001 as cover to force their long-standing desire to see an American invasion of Iraq. Despite all of the information to which I have access, I remain very skeptical that the nation of Iraq poses a serious and immanent terrorist threat to the United States. If I were convinced of such a threat I would support going to war, as I did when I supported President Bush by voting to give him both the authority and the necessary funding to fight the war on terror.

Mr. Speaker, consider some of the following claims presented by supporters of this resolution, and contrast them with the following facts:

Claim: Iraq has consistently demonstrated its willingness to use force against the US through its firing on our planes patrolling the UN-established "no-fly zones."

Reality: The "no-fly zones" were never authorized by the United Nations, nor was their 12 year patrol by American and British fighter planes sanctioned by the United Nations. Under UN Security Council Resolution 688 (April, 1991), Iraq's repression of the Kurds and Shi'ites was condemned, but there was no authorization for "no-fly zones," much less airstrikes. The resolution only calls for member states to "contribute to humanitarian relief" in the Kurd and Shi'ite areas. Yet the US and British have been bombing Iraq in the "no-fly zones" for 12 years. While one can only condemn any country firing on our pilots, isn't the real argument whether we should continue to bomb Iraq relentlessly? Just since 1998, some 40,000 sorties have been flown over Iraq.

Claim: Iraq is an international sponsor of terrorism.

Reality: According to the latest edition of the State Department's Patterns of Global Terrorism, Iraq sponsors several minor Palestinian groups, the Mujahedin-e-Khalq (MEK), and the Kurdistan Workers' Party (PKK). None of these carries out attacks against the United States. As a matter of fact, the MEK (an Iranian organization located in Iraq) has enjoyed broad Congressional support over the years. According to last year's Patterns of Global Terrorism, Iraq has not been involved in terrorist activity against the West since 1993 – the alleged attempt against former President Bush.

Claim: Iraq tried to assassinate President Bush in 1993.

Reality: It is far from certain that Iraq was behind the attack. News reports at the time were skeptical about Kuwaiti assertions that the attack was planned by Iraq against former. President Bush. Following is an interesting quote from Seymore Hersh's article from Nov. 1993:

Three years ago, during Iraq's six-month occupation of Kuwait, there had been an outcry when a teen-age Kuwaiti girl testified eloquently and effectively before Congress about Iraqi atrocities involving newborn infants. The girl turned out to be the daughter of the Kuwaiti Ambassador to Washington, Sheikh Saud Nasir al-Sabah, and her account of Iraqi soldiers flinging babies out of incubators was challenged as exaggerated both by journalists and by human-rights groups. (Sheikh Saud was subsequently named Minister of Information in Kuwait, and he was the government official in charge of briefing the international press on the alleged assassination attempt against George Bush.) In a second incident, in August of 1991, Kuwait provoked a special session of the United Nations Security Council by claiming that twelve Iraqi vessels, including a speedboat, had been involved in an attempt to assault Bubiyan Island, long-disputed territory that was then under Kuwaiti control. The Security Council eventually concluded that, while the Iraqis had been provocative, there had been no Iraqi military raid, and that the Kuwaiti government knew there hadn't. What did take place was nothing more than a smuggler-versus-smuggler dispute over war booty in a nearby demilitarized zone that had emerged, after the Gulf War, as an illegal marketplace for alcohol, ammunition, and livestock.

This establishes that on several occasions Kuwait has lied about the threat from Iraq. Hersh goes on to point out in the article numerous other times the Kuwaitis lied to the US and the UN about Iraq. Here is another good quote from Hersh:

The President was not alone in his caution. Janet Reno, the Attorney General, also had her doubts. "The A.G. remains skeptical of certain aspects of the case," a senior Justice Department official told me in late July, a month after the bombs were dropped on Baghdad…Two weeks later, what amounted to open warfare broke out among various factions in the government on the issue of who had done what in Kuwait. Someone gave a Boston Globe reporter access to a classified C.I.A. study that was highly skeptical of the Kuwaiti claims of an Iraqi assassination attempt. The study, prepared by the C.I.A.'s Counter Terrorism Center, suggested that Kuwait might have "cooked the books" on the alleged plot in an effort to play up the "continuing Iraqi threat" to Western interests in the Persian Gulf. Neither the Times nor the Post made any significant mention of the Globe dispatch, which had been written by a Washington correspondent named Paul Quinn-Judge, although the story cited specific paragraphs from the C.I.A. assessment. The two major American newspapers had been driven by their sources to the other side of the debate.

At the very least, the case against Iraq for the alleged bomb threat is not conclusive.

Claim: Saddam Hussein will use weapons of mass destruction against us – he has already used them against his own people (the Kurds in 1988 in the village of Halabja).

Reality: It is far from certain that Iraq used chemical weapons against the Kurds. It may be accepted as conventional wisdom in these times, but back when it was first claimed there was great skepticism. The evidence is far from conclusive. A 1990 study by the Strategic Studies Institute of the U.S. Army War College cast great doubts on the claim that Iraq used chemical weapons on the Kurds. Following are the two gassing incidents as described in the report:

In September 1988, however – a month after the war (between Iran and Iraq) had ended – the State Department abruptly, and in what many viewed as a sensational manner, condemned Iraq for allegedly using chemicals against its Kurdish population. The incident cannot be understood without some background of Iraq's relations with the Kurds…throughout the war Iraq effectively faced two enemies – Iran and elements of its own Kurdish minority. Significant numbers of the Kurds had launched a revolt against Baghdad and in the process teamed up with Tehran. As soon as the war with Iran ended, Iraq announced its determination to crush the Kurdish insurrection. It sent Republican Guards to the Kurdish area, and in the course of the operation – according to the U.S. State Department – gas was used, with the result that numerous Kurdish civilians were killed. The Iraqi government denied that any such gassing had occurred. Nonetheless, Secretary of State Schultz stood by U.S. accusations, and the U.S. Congress, acting on its own, sought to impose economic sanctions on Baghdad as a violator of the Kurds' human rights.

Having looked at all the evidence that was available to us, we find it impossible to confirm the State Department's claim that gas was used in this instance. To begin with. There were never any victims produced. International relief organizations who examined the Kurds – in Turkey where they had gone for asylum – failed to discover any. Nor were there ever any found inside Iraq. The claim rests solely on testimony of the Kurds who had crossed the border into Turkey, where they were interviewed by staffers of the Senate Foreign Relations Committee…

It appears that in seeking to punish Iraq, the Congress was influenced by another incident that occurred five months earlier in another Iraqi-Kurdish city, Halabjah. In March 1988, the Kurds at Halabjah were bombarded with chemical weapons, producing many deaths. Photographs of the Kurdish victims were widely disseminated in the international media. Iraq was blamed for the Halabjah attack, even though it was subsequently brought out that Iran too had used chemicals in this operation and it seemed likely that it was the Iranian bombardment that had actually killed the Kurds.

Thus, in our view, the Congress acted more on the basis of emotionalism than factual information, and without sufficient thought for the adverse diplomatic effects of its action.

Claim: Iraq must be attacked because it has ignored UN Security Council resolutions – these resolutions must be backed up by the use of force.

Reality: Iraq is but one of the many countries that have not complied with UN Security Council resolutions. In addition to the dozen or so resolutions currently being violated by Iraq, a conservative estimate reveals that there are an additional 91Security Council resolutions by countries other than Iraq that are also currently being violated. Adding in older resolutions that were violated would mean easily more than 200 UN Security Council resolutions have been violated with total impunity. Countries currently in violation include: Israel, Turkey, Morocco, Croatia, Armenia, Russia, Sudan, Turkey-controlled Cyprus, India, Pakistan, Indonesia. None of these countries have been threatened with force over their violations.

Claim: Iraq has anthrax and other chemical and biological agents.

Reality: That may be true. However, according to UNSCOM's chief weapons inspector 90-95 percent of Iraq's chemical and biological weapons and capabilities were destroyed by 1998; those that remained have likely degraded in the intervening four years and are likely useless. A 1994 Senate Banking Committee hearing revealed some 74 shipments of deadly chemical and biological agents from the U.S. to Iraq in the 1980s. As one recent press report stated:

One 1986 shipment from the Virginia-based American Type Culture Collection included three strains of anthrax, six strains of the bacteria that make botulinum toxin and three strains of the bacteria that cause gas gangrene. Iraq later admitted to the United Nations that it had made weapons out of all three…

The CDC, meanwhile, sent shipments of germs to the Iraqi Atomic Energy Commission and other agencies involved in Iraq's weapons of mass destruction programs. It sent samples in 1986 of botulinum toxin and botulinum toxoid – used to make vaccines against botulinum toxin – directly to the Iraqi chemical and biological weapons complex at al-Muthanna, the records show.

These were sent while the United States was supporting Iraq covertly in its war against Iran. U.S. assistance to Iraq in that war also included covertly-delivered intelligence on Iranian troop movements and other assistance. This is just another example of our policy of interventionism in affairs that do not concern us – and how this interventionism nearly always ends up causing harm to the United States.

Claim: The president claimed last night that: "Iraq possesses ballistic missiles with a likely range of hundreds of miles; far enough to strike Saudi Arabia, Israel, Turkey and other nations in a region where more than 135,000 American civilians and service members live and work."

Reality: Then why is only Israel talking about the need for the U.S. to attack Iraq? None of the other countries seem concerned at all. Also, the fact that some 135,000 Americans in the area are under threat from these alleged missiles is just makes the point that it is time to bring our troops home to defend our own country.

Claim: Iraq harbors al-Qaeda and other terrorists.

Reality: The administration has claimed that some Al-Qaeda elements have been present in Northern Iraq. This is territory controlled by the Kurds – who are our allies – and is patrolled by U.S. and British fighter aircraft. Moreover, dozens of countries – including Iran and the United States – are said to have al-Qaeda members on their territory. Other terrorists allegedly harbored by Iraq, all are affiliated with Palestinian causes and do not attack the United States.

Claim: President Bush said in his speech on 7 October 2002: " Many people have asked how close Saddam Hussein is to developing a nuclear weapon. Well, we don't know exactly, and that's the problem…"

Reality: An admission of a lack of information is justification for an attack?

_______________________________________________

Ron Paul, M.D., represents the 14th Congressional District of Texas in the United States House of Representatives.

antiwar.com



To: techguerrilla who wrote (8027)10/11/2002 7:39:06 AM
From: stockman_scott  Respond to of 89467
 
Software Stocks That Still Shine

OCTOBER 11, 2002
INVESTING Q&A
BusinessWeek Online
businessweek.com

S&P analyst Jonathan Rudy says to look to security and game companies. He especially likes Symantec and Electronic Arts

Software stocks, like those of many other companies in the world of technology, await a revival in corporate capital spending for their own revival. But two areas of software -- Internet security and video games -- are ripe for investment now, according to Jonathan Rudy, Standard & Poor's industry analyst covering software and commercial-services stocks.

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Rudy gives strong buy rankings to one company in each of those niches: Symantec in security and Electronic Arts in game software. Just one level lower down, with accumulate ratings, are companies such as giant Microsoft, which Rudy sees as still a growth stock -- although he expects its growth to be in the low double-digits instead of the 20% or more of the past. Still, that is "impressive compared to the rest of its peer group," Rudy adds.

Other stocks in his coverage area drawing accumulate recommendations are Check Point Software, Oracle, PayChex, and THQ. However, Rudy notes that S&P suggests investors underweight technology in general as a portion of their portfolios and adds that "stock selection is critical in this type of environment."

These were some of the points Rudy made in an investing chat presented Oct. 8 by BusinessWeek Online and Standard & Poor's on America Online. He was responding to questions from the audience and from BW Online's Jack Dierdorff. Following are edited excerpts. A complete transcript is available from BusinessWeek Online on AOL at keyword: BW Talk.

Q: Jon, the market alternately scared and pleased us today, but it wound up ahead -- what do you at S&P see as the near-term outlook for the broad market?
A: I can't speak for the broader sector, but...as far as technology, we're still underweight. And as such, stock selection is critical in this type of environment.

Q: How have the stocks you cover -- software and commercial services -- borne up under the selling pressure?
A: It has been tough. My software group -- my coverage universe -- is down 58% year to date. And the payroll processors I cover under commercial services are down 36% year to date. So it has been very challenging.

Q: Let's go to a giant in your turf -- is Microsoft (MSFT ) still a growth stock?
A: Yes, it is. However, the days of 20% growth are over. Most likely, Microsoft will grow in the low double digits. But despite this challenging economic environment, it's still growing approximately 10%-plus, which is impressive compared to the rest of its peer group.

Q: Is Siebel Systems (SEBL ) a buy?
A: We have a hold recommendation on SEBL, which has gotten hammered lately after announcing a very disappointing second quarter. We expect the environment to continue to be difficult for Siebel. However, with the shares trading at $5.65, with over $4 per share in cash, we would still hold Siebel at this time.

Q: To follow up on Siebel's second-quarter disappointment, do you have any hopes for revived earnings in your coverage area? Or does corporate capital spending have to revive first?
A: For the enterprise-software providers, they're absolutely dependent upon corporate info-tech spending at least stabilizing, which we have not seen in this environment. Therefore, estimates continue to come down for companies like Siebel, PeopleSoft (PSFT ), Veritas (VRTS ), and Oracle (ORCL ). However, other areas such as Internet security and video-game software do not necessarily need corporate IT spending to rebound.

Q: I'm interested in your opinion on Check Point Software (CHKP ) and Citrix Systems (CTSX ).
A: I don't cover Citrix. However, we have a 3-STAR, or hold, recommendation on the shares. However, I do cover Check Point and have a 4-STAR, or accumulate, recommendation on the shares. Check Point has nearly $5 per share in cash, with no debt, and is extremely profitable, with net margins around 60%. We continue to like Check Point and believe that this leader in the firewall and VPN [virtual private networks] markets will continue to take share.

Q: You mentioned this one -- where do you see PeopleSoft (PSFT ) going? Fairly priced now?
A: We have a hold recommendation on the shares, primarily due to its strong balance sheet, with over $5 per share in cash and relatively little debt. However, near-term there will likely be pressure on the shares, as estimates will likely continue to get cut due to the challenging global economy.

Q: You referred to Oracle just a minute ago, and several people are asking what you think of ORCL now.
A: I have a 4-STAR, or accumulate, recommendation on the shares. It's another software company that has a very strong balance sheet, with over $6 billion in cash and practically no debt. It's also extremely profitable, with 30% operating margins and a return on equity of over 30%. Its database business is very solid. However, our primary concerns with the company are its weak applications business and continuing concerns over Larry Ellison's management style. But despite that, we believe the shares are still attractive.

Q: SAP (SAP ) has really been hit! Are things worse than usual for that company?
A: I don't cover SAP analytically. However, from a competitive perspective, it has been an extremely difficult environment for the enterprise-software companies. And the latest shoe to drop has been in Europe, which affects SAP significantly more than companies like Siebel and PeopleSoft.

Q: Do you think Sapient (SAPE ) can make it back up to $10?
A: I don't cover Sapient. However, it was recently dropped from our coverage universe due to low price levels. I would have to say the odds are against Sapient ever getting back to $10. Once a stock hits the $1 level, not many companies make it back.

Q: What about ITWO (i2 Technologies)?
A: I did cover i2 Technologies and recently had to drop them from coverage due to shares trading below $1. We had carried an avoid recommendation at the time.

Q: Understandably, you have a lot of stocks ranked hold, and you've mentioned one or two accumulates. Are there any buys in your coverage now?
A: Sure. Our two top-rated stocks are Symantec (SYMC ) and Electronic Arts (ERTS ). Symantec is a leader in Internet-security software and continues to do very well in its consumer antivirus business, as it makes progress in the enterprise-security market. It trades at a reasonable valuation with a p-e-to-growth rate of around 1.1 times, which is very reasonable in the software universe.

Electronic Arts (ERTS ) is the leader in video-game software and has the strongest and most diverse brands of any company in that field. We continue to like both of these companies very much and have price targets in the upper 30s for Symantec and mid-70s for Electronic Arts.

Q: What about ISSX (Internet Security Systems)?
A: I recently initiated coverage on ISSX with a hold recommendation. They are the leader in intrusion-detection software. However, our primary concern at this point is valuation and their dependence on the enterprise market.

Q: Why the hold recommendation? Isn't security software at its highest demand now?
A: It depends on the type of security software, such as antivirus, intrusion detection, or firewall security. Our primary concern with ISSX is its valuation.

Q: What about the prospects for PMTC (Parametric Technology)?
A: I have a hold recommendation on Parametric with the shares trading near cash with no debt. We would still hold Parametric. However, near-term prospects remain challenging.

Q: What is your take on RATL (Rational Software)?
A: We have an avoid recommendation on the shares. Despite trading below cash levels, this is another software company that has a higher debt-to-equity ratio than its peer group. Also, there are management concerns, which would lead us to avoid the shares at this time.

Q: What about BEAS (BEA Systems)?
A: I have a hold recommendation on the shares. BEA remains a leader in the application-server space. However, IBM (IBM ) has proven to be a formidable competitor for BEA, and we would hold shares at this time.

Q: How about VRTS (Veritas)? It seems to have been beaten down unnecessarily.
A: I have a hold recommendation on the shares, primarily due to their premium valuation, but also due to their vulnerability to estimate cuts in this environment. We think Veritas has a very bright future and a very strong balance sheet, with nearly $4 a share in cash and almost no debt. However, with recent management turmoil, such as the CFO leaving under difficult circumstances, we would not add to positions at this time.

Q: Can you refresh us on the stocks you give 4-STARS to? Accumulates?
A: Sure. Check Point Software (CHKP ), Oracle (ORCL ), Microsoft (MSFT ), THQ (THQI ), and PayChex (PAYX ). Basically, the common theme with these companies is strong balance sheets, strong cash flow from operations, solid profitability, and market leadership -- all of which are important characteristics in this difficult environment.

Q: What about ADSK (AutoDesk)?
A: I have a hold recommendation on the shares. Despite their reasonable valuation, I have been disappointed with recent management execution and would not add to positions at these levels.

Q: How do you and S&P select software companies for coverage? Do sales and market caps, for example, play a role?
A: Absolutely. Those are two of the criteria. Additional criteria include whether or not it's an index company, stock-price levels (i.e., over $5 a share), and a float balance.

Q: Judging from all the questions here today, there's still a lot of interest (online anyway) about tech stocks and, in this case, software. Do you think it's justified, Jon?
A: Absolutely. In regard to software, it's important to focus on the leading companies with strong balance sheets, cash flow, and earnings. Companies that have those qualities should survive and emerge from this downturn stronger than ever. For example, Microsoft is increasing its R&D budget by approximately 20% this fiscal year, to over $5.2 billion, which is larger than the revenues of the majority of the software companies in my universe. It can continue to innovate while others have to retrench, which will be a distinct competitive advantage going forward.

Q: The question is, what you should buy now? And what should existing investors hang on to?
A: Just to reiterate, I have 4-STAR or accumulate ratings on Check Point Software, Oracle, Microsoft, THQ, and PayChex. And I have strong buys on Symantec and Electronic Arts.

Edited by Jack Dierdorff