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Technology Stocks : Genesys Telecommunications (GCTI) -- Ignore unavailable to you. Want to Upgrade?

To: David A. Stern who wrote (68)	3/14/1998 9:42:00 AM
From: Elmer	Respond to of 220

David, I think this is a very potential stock that is reasonably priced. In fairness, I'm really not that smart as an investor. I learned about a decade ago that you don't have to be to beat the averages. You just need to know who is smart and follow them with some concern about value. I have come to believe that Roger McNamee is going to be the next Peter Lynch or Warren Buffet. He mentioned this stock in a year end Fortune Magazine Investor guide. While Roger isn't always right, he is a lot more frequently than most. So when I invest in one of his recommendations, I am usually comfortable that the fundamentals of the company are in place. Given that, all you have to do is try not to overpay. The best guidance I've found to keep from overpaying is in Peter Lynch's second book. He said that he starts to buy a stock when its long term growth rate equals its P/E on forward earnings. He added that he backs the truck up when the P/E is 80% of the growth rate. I find this valuation approach works fairly well with software stocks with a few exceptions were a stock has been busted like Remedy (which now sells for about 65% of its growth rate). The other key for me is to have a double down mentality about these investments. This is where I may get killed if a long term bear market sets in. But to your question of value, go to quicken.excite.com which provides this companies long term expected earnings growth rate (55%) and its forward expected EPS in 1999 (54 cents). If you multiply the two together, you get a price fairly close to where we are now. I find my biggest problem in investing is holding into extreme valuation. If I can ever learn to do that, I might get good at investing. For instance, GCTI could easily expand its multiply to 100 times forward earnings. l usually can't help myself when stocks go to extremes. I sell. I did with Peoplesoft and the stock price just went higher and higher. So, I think being reluctant to sell a winner especially in software is what makes you a great investor. I'm still too addicted to the action and feel a need to move money around usually with no real enhancement to my performance. Two final things. Follow the posts of Clam Clam. He has an extraordinary insight into the technologies of these companies. He adds value to every thread he contributes to. Second, read the "Gorilla Game" by Geoff Moore. It's as good as it gets. It's good to see you on this thread and I appreciate your kind words. Best Regards David

To: David A. Stern who wrote (68)	3/14/1998 11:22:00 AM
From: Elmer	Respond to of 220

David, One other observation on GCTI. This is anecdotal so take it for what it is worth. You may recall that I owned SAP's stock about two years ago. One of the reasons I made that purchase was a comment that a friend made about attending a convention where SAP was an exhibitor. He said that most of the exhibitor's booths were empty but at the SAP booth, they were taking reservation because of the crowds. SAP's stock was about $45/share at that time. Today is about $145/share. Again I sold too soon. If you look at post #60, Bobo said that GCTI had noticeably larger crowds than other vendors at a recent show. That's good enough for me. Regards David