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

To: im a survivor who wrote (6668)	4/14/2003 11:16:44 AM
From: Stock Farmer	Respond to of 6974

And what stocks are you looking at that you feel have a reasonable shot at a 20 bagger. Thanks.... That's not a serious question, is it? If it is, the answer is "all around you, but probably not where you are looking". You won't find these returns waiting for you on the public market. Not often enough to make the search worthwhile, that is. Where you have a chance of finding these "stocks" is in private companies. However, when the deal is available, the stocks don't exist. 'Cause mostly the companies don't exist and that's why they are willing to give up so much... 'cause otherwise they will continue to not exist! For those kinds of returns, it's necessary to think like a VC. Go down the street. Knock on the door of a VC. Ask them what kind of returns they are looking for on a portfolio basis, on a risk/return basis and on an individual investment basis. Inquire about the hurdles they use, and the terms they put in place. It's complicated. There isn't any one recipe, and it's completely not applicable to trading the secondary market. But it boils down to a very simple process. A company comes to me asking for money. I try to figure out "if they execute, what might they be worth"? Take that, and divide it by 20. That is the maximum I would invest if I was looking for a 20:1 return, and even then I would want 100% of their company. Scale it back from there, leaving room for others at the table who might have to come after me. And adjust for risk. Because their entire story is merely a fabrication at this point. And the reason I would look for a 20:1 return is 'cause the odds are that they will fail. If there's only a 10% chance that they succeed and that success will take 5 years, then if I structure a deal with a 20:1 hurdle, then my expectation value is a 14.9% APR. Decide. Commit. And Repeat. Then hustle like crazy to help them succeed, or risk flushing an investment down the toilet. There is no such thing as "easy money". John