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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (286)	3/23/1998 8:18:00 PM
From: Rick	Respond to of 4509

Paul - Agreed. The point I was trying to make (in shorthand) was that I think there are many that simply look at the PE ratio and assume that the market has gone mad. PSFT's quality of earnings get high marks for both it's perceived conservative revenue recognition approach and the fact that a customer contract typically represents a long term earnings stream, even beyond the initial contract. Furthermore, a customer which signs up for one business function (hr, for example)is more likely to become a future customer for another (financials, manufacturing, etc.) Looking at the current earnings on Peoplesoft, while important for any investor to do, does not tell the most important story - it has created a machine to produce business software for any conceiveable business function for medium and large businesses. It has gained credibility by selling to the world's largest corporations. This is a very profitable business and the long run earnings potential is enormous. In fact, the high PE would be enough to scare me away if I didn't understand its market opportunities. I imagine most shorts have a generalized understanding of the software market, at best. Rick.