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Technology Stocks : PSFT - 1997 Outlook [closed thread] -- Ignore unavailable to you. Want to Upgrade?

To: Satyr who wrote (851)	2/2/1998 11:28:00 PM
From: Rick	Read Replies (2) \| Respond to of 940

Satyr - I was using closing prices. Also, I was not looking at each calendar month separately but by rolling 30 day period. I also only count the February '97 correction (Red Pepper) once - not February and April. Anyway, the overall point that I am trying to make is that if you look at the data, Peoplesoft is really not all that volatile if we limit our discussion of volatility to downside corrections [ Note: The classic definition of volatility includes the upside, which of course makes this a volatile stock - but that's a good thing]. Anyway, I personally think its quite phenomenol that this stock has only had 1 significant and sustained (Red Pepper Feb '97, 3 months down - 3 months back) downside correction in its history. The blip we just experienced, I don't consider a correction since it was very short lived and triggered by Asia jitters. In fact, to lend further support to dismissing the blip, it would have been less serious had the stock not spiked from 35 to 39 in the last two days of the year when we didn't have full market participation (shortened trading days, probably alot of individual investors). Again, if we exclude the Red Pepper correction and the Asia jitters mini-correction, we really have a stock that has had very limited to moderate downside volatility and huge upside volatility. Take a look at the whole chart, its really phenomonal. I highly doubt that there is another technology stock out there with less downside volatility since 1994. If you know of one please let me know because it is a very attractive characteristic. If the pattern keeps up you will continue to do very well by trading the 5-10% fluctuations. Don't get too cocky, though. I also continue to believe that the greatest risk to Peoplesoft stock price is external events or a large acquisition (ala Red Pepper only bigger). They continue to execute the business plan very well in market space that is just ramping up and very profitable. I can barely contain my enthusiasm, which is scary because I tend to be a more dispassionate investor. Every once in a while an investment opportunity comes along that is so clear to me that all I can do is shake my head in disbelief to anyone that believes the stock is overvalued. I have yet to come accross anybody that understands the opportunities in the ERP market that does not agree that this company is not anywhere near its potential. In my mind, the major risks are: 1) General Market Risk - Uncontrollable, Unpredictible. 2) Tech Stocks Market Risk - same as above. 3) Peoplesoft Execution Risk - This is real, they could put out a release with too many bugs and lose some customer goodwill, but I am betting they won't. Besides SAP has been doing a great job of setting market expectations low (of course their customers tend to be the largest most complex). 4) Peoplesoft Overly Ambitious Acquisition - that drives growth projections down and dilutes EPS. Who knows about this one. I would guess that strategically they need to strengthen the stock a bit before next big acquisition. Anyway, I am rambling. Will somebody please provide a balanced counter-argument about the prospects of Peoplesoft based on an understanding of the business opportunities and Peoplesofts competitive position ? Any of you folks from SAP, BAAN, or Oracle want to take a shot ? Is there enough profit for all 4 to prosper in this market for the forseeable future ? Later, Rick.