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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Mr Logic who wrote (12570)	3/13/1998 10:08:00 AM
From: Steve Woas	Read Replies (1) \| Respond to of 31646

No offense intended, but anybody who believes this is a fool: "you don't fix any significant number of problems after 1/1/2000)" Anyone who makes these kind of statements simple has no concept of the Y2K problem. Y2K'ly yours, Steve

To: Mr Logic who wrote (12570)	3/13/1998 10:23:00 AM
From: JDN	Read Replies (2) \| Respond to of 31646

Dear Patrick: If you insist on giving Y2K work a value of 1, what will you assign to the value of the NEW customer contacts. Jenkins on several occassions has mentioned how excited he is and how much opportunity presents itself by moving from the factory level to the executive level of even their EXISTING customers. Then of course there are and will be even more NEW customers. I maintain it is that customer base that makes this stock so exciting. JDN

To: Mr Logic who wrote (12570)	3/14/1998 12:10:00 AM
From: GoodQ	Respond to of 31646

I am not sure I really want to comment on PE=1,(I like to see the stock price drops so I can buy some more), but anyway- One needs to understand the idea of the P/E valuation model first to understand why NO One assigns PE=1 to any company. The PE model of valuation is based on streams of future earning discounted to present value based on Historical PE of the company or general market/sector. There are two cases: a)No earning/loss, b)signifcant earning so a PE can be calculated. No need to explore (a). In the case of (b), The valuation model is thus rely on the proper projection on earnings which is really the key. It is acceptable to exclude one time/short term earnings for PE if you believe such one time income has little effect on future streams of earnings. In general, that is how some people treats short term/one time income. It is excluded from the earning for the PE calculation, but no one assigns a PE=1. This exclusion is acceptable since normally, one time incomes are not a large sum compared to a company's long term income. This, however, do not apply to Y2K companies, and that was why I said that traditional model don't work well. I will give an example why excluding Y2K income because one thinks it is short term is flawed; or a very conservative method for valuating Y2K companies. Take whatever number you think Y2K will generate the next two years and assume it stops after year 2000. Invest that money on treasury bills. this investment will generate a stream of income which adds to the earning, calculate the PE based on historical norm of the industry. The price is than one value for that stock. I believe this is more fair in handling the short term Y2K profits if you believe the Y2K income to be one time only. GQ P.S. I personally don't believe Y2K income is short term only, and I also included other possibility on what TAVA may transform into post 2000 for my own valuation calculation.

To: Mr Logic who wrote (12570)	3/14/1998 1:59:00 AM
From: Quad Sevens	Read Replies (1) \| Respond to of 31646

Patrick: I see that I read your post too hastily, perhaps because you agreed with Skeptic (who, despite "always reasonable" posts, is prone to mistakes, superficial analyses, and facile textbook valuation methods). I now see that you are trying to take into account the windfall y2k earnings in the base business, which is a good idea. So that we (including Skeptic) can see that according a PE of 1 to one-time earnings windfalls can be a bad error, perform the following thought experiment. Go back in time, say to 1985, and ask yourself: If Warren Buffet had infused Microsoft with a lump sum of 100 million dollars at that time, what would have been the market reaction? Would it simply have judged the market cap of MSFT to now be its previous market cap + 100 million? No way. The market would make an attempt to judge what Gates, in that particular environment of feverish PC-industry expansion, could do with that money. In other words: What was the present value (then) of 100 million dollars in Gates's hands at that particular time? Now, the market wouldn't have given Gates his current PE on that lump sum either, for it usually takes time to set plans in motion. But if MSFT had been growing at 60% per year, this lump sum could surely have been grown at 30% per year (minimum) for the foreseeable future--say 10 years. Discount for inflation or T-bill rate of 5% per year. You get a real growth rate of 25 % per year. In 10 years, you multiply your initial investment over 9 fold, in present dollars. That equates to a PE on the windfall of 9, and all of these estimates are very conservative (and things don't stop after 10 years as we all know with MSFT). Furthermore, everyone seems enamored of the formula growth rate = PE (ask the Gardners, hah!), so the market is likely to value Gates's lump sum at 30x100 million or greater. Now, TAVA is not MSFT and Jenkins is not Gates. Yet we know TAVA is in the process of rapid expansion in a very fragmented industry. Can Jenkins put the y2k windfall to work to great advantage here? You bet. So what PE should be accorded this windfall? I'm still not sure. If TAVA can grow this part of its capital at 20%, then a PE of 20 on that sum is not farfetched. Wade PS: Those who are saying a PE of 50 should apply to y2k earnings are, ahem, being a little extravagant. However, the market is known for being wildly extravagant at times. And "embedded chip fever" has still not caught on.