Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: lbs who wrote (7398)	10/31/1997 8:49:00 AM
From: Craig Rogers	Read Replies (2) \| Respond to of 13949

To All: Will Zitel's downfall bring down the Y2k sector with it today? craig

To: lbs who wrote (7398)	10/31/1997 11:17:00 AM
From: Jeffrey S. Mitchell	Respond to of 13949

Dan, you are correct in your statement that skiddish investors, when deciding which stocks to sell, will choose the ones with high PEs first. And, yes, most of the Y2K stocks fit in that category. Your question whether Y2K stocks will eventually justify their lofty PEs boils down to whether one believes Y2K is really a $100-600B problem. Well, we have a whole Y2K research thread on SI (thanks to Cheryl) that seems to, IMO, conclusively show that it is. And, unlike other projects, Y2K stuff has an immovable deadline. As I stated on the ALYD thread, companies have been outsourcing stuff to body shops for years. Thus, as Mad Monk predicted, these guys were the first to get projects and now they are the first to announce revenues. And just look at their amazing growth... all attributable to an explosion of Y2K work. That's a very good sign for Y2K investors in general. As for the tool vendors, let's not forget that they are offering to automate a problem that no one has attempted to automate before, and thus have no track record. That's why companies are hesitant to hand these vendors, up-front, anything more than 1-3 million lines. But it's these same companies that also have tens of millions of lines of code in reserve; it's these companies that are making a statement that automation is the only way they can hope to get it all fixed on time. As to which tool vendors represent the best investment... throw away alliances, throw away "silver-bullet" hype, and just look at which companies the marketplace has decided to give its work to. In other words, look at which companies actually have the contracts. These are ones that will make the mistakes first. These are the ones that will shake the bugs out of their software first. These are the ones that are in the best position to land what I would call the "pot-of-gold" second contracts-- the ones you get once you prove you can do what you say you can. Lastly, when companies run out of time either through procrastination or trying to fix the Y2K problem themselves, these are the companies they will call first. And, finally, as regards Y2K companies lasting past the year 2000, let's not forget these guys should be flush with cash when all is said and done. There's also the Euro problem, migration work, electronic commerce, etc; enough, IMO to keep them busy for years to come. However, even if you think Y2K is a giant pyramid scheme, at these current prices I think it's safe to say the pyramid is just now being built. - Jeff