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Technology Stocks : Safeguard Scientifics SFE -- Ignore unavailable to you. Want to Upgrade?

To: Rob Palmer who wrote (1228)	3/14/1998 1:25:00 PM
From: John Arnopp	Respond to of 4467

Rob, I don't know whether SFE will reach new highs, but I would like to see it. If it does, I think it will be riding NAV, because historically SFE has not been valued using the private portfolio. Apparently, though, it has traded at a premium to NAV historically, and now we are getting it at a discount! I would actually prefer that SFE not get too much "momentum" behind it, and start trading at a big premium to NAV, or factor the price of the private portfolio into the share price. If the market starts to crack, SFE would probably take a huge fall. Conservative valuation serves the long-term shareholders better: better buying opportunities and a more stable share price assures Safeguard the flexibility it needs to do deals. Since, I hope, most Safeguard shareholders are not trading SFE, but buying and holding for the rights offerings, a steady & gradual rise beats momentum in my book any day. Good investing, --John

To: Rob Palmer who wrote (1228)	3/14/1998 11:37:00 PM
From: michael r potter	Respond to of 4467

Rob, Yes, I do think SFE will exceed the '96 high this year. The day is coming when SFE will be jumping multiple points in a day and trading at a substantial premium to NAV. I have also been thinking lately that one should enjoy these days of a steady controlled advance, with SFE trading at a discount to NAV., because the decision to hold is very easy. For a long term investor, it gets tough when SFE trades at a big premium and the underlying portfolio is way overpriced as happened in '96. That will happen again. Part of the reason is just the gradual increase in public participation, especially speculative buying of individual stocks, (cheap internet trading, and as greed tightens its grip, 20% from a fund is not enough-buy a stock and get a home run), speculative fund buying (they overcome their liquidity fear and reach for performance, especially when some big S&P names start faltering as is starting to happen now.) Momentum and greed are a powerful combination when in full bloom. As the memory of '96 fades and the lesson of last Oct. is fully felt (dips are for buying, only whimps and "old timers" fear), the market is gradually setting up for another speculative (small-mid cap.) blow-off, probably bigger than the last. This year or next? When that happens, SFE will have already exceeded the '96 high and be headed to levels we may find astonishing. If the market is willing to pay 40 to 45 X engs. for steady 15% to 20% growers now, what P.E. will it ultimately pay for partnership companies growing at 40% to 50%? There will, of course, be scary sell-offs before then, which will only serve to keep the momentum alive and reinforce the buy-on-dip mentality. My thanks to you all for the high quality of input you give to this thread. Mike

To: Rob Palmer who wrote (1228)	3/16/1998 5:22:00 PM
From: still learning	Respond to of 4467

Re SFE taking out old highs at $47+: I should first say, my goal is a long-term hold, and I do not trade in this stock, though I watch it very closely. FYI I've held this stock for about 7 years. The following is a brief history from memory (so don't hold me to exact dates/timeframes). SFE can stay stuck in a narrow band for a long time, and then break out rapidly. It went through a similar narrow range from about 1991-93 (for about the first 3 years I owned it) and was stuck at $17 most of that time (they have since split 6:1 cumulatively). I bought it as a back-door Novell purchase, with all the other companies free (it was valued only at the NOVL NAV). It was very hard at that time for SFE to "prove" the value of any other companies. I almost sold it many times during the first three years, but since it was in my IRA, I held onto it. Then, it took off and went up about 4x in about 18 months, and has been a steady performer for much of the time since -- usually in bursts with some volatility that can be harrowing at times. I mostly hold it because I view it as a "blue-chip" VC company with diversified technology interests, and therefore sheltered somewhat from meltdowns in poor markets. Last year that proved not to be true. Turned out, in last year's tech wrech there was no shelter. Also contributing was the fact that last year it finally go ahead of itself and went way too fast to $47. That was about 14 months ago (plus/minuus). The 1997 retrenchement was the first real down-period I had seen the stock, as it pulled back to high 20s/low30s. It's been stuck in that range ever since until just now. I believe this is a stock that moves in bursts, and while there are some regular patterns that go along w/ predictable movements based on NAV and rights offerings, SFE is heavily influenced by market psychology. And right now, after a tough year in tech, things finally appear to be gettting better. SFE is benewfitting from that. We may be seeing a repeat of the fast advances that took place about 3 years ago. In short, I think we'll finally see a new all-time high this year. But be careful, depending on your time horizon, this stock can be volatile if it goes up that fast. Last time it was at $47 for only a couple of weeks before plunging back to earth, and it went from (then $70 to $94 way too fast to sustain it.)