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Technology Stocks : The Learning Company (TLC) -- Ignore unavailable to you. Want to Upgrade?

To: Peter Goss who wrote (4471)	4/10/1998 3:34:00 PM
From: Carmine Cammarosano	Read Replies (1) \| Respond to of 6318

It is a lot easier knowing when to buy than when to sell...your comments are appreciated...some thoughts:1)You could have used some of your reasons to sell the overall market when it hit 5000, 6K, 7K, and even 8K...2)If you sell something and assuming you want to put the cash to work, then you have to buy something else, which is not an easy task...3)One has to believe in the future of the company to be able to hold for a long time and I suspect many holding TLC see an expanding market that is not going to come to an end in 6 months...4)With a little better growth in the near future, TLCs balance sheet will continue to improve and the market will most certainly expand the multiple that they will pay. 5)We continue to be in a low interest environment which will help pay off/refinance TLCs' debt. 6)Management has paid too much for other companies, but that is the past and I suspect they are a little older and a little wiser now 7)"fool" deserves more than just contempt, he/she needs to be thrown in jail. 8)Sell your losers and keep your winners, for the past year TLC has been in an uptread...good luck!

To: Peter Goss who wrote (4471)	4/11/1998 9:13:00 AM
From: Trader Dave	Respond to of 6318

Short lycos, Yahoo, and amazon and selling your TLC? Ouch! (I don't disagree about the ridiculous nature of the tulip stocks, but tlc is in quite a different class.) I agree that TLC has had a good run, but it is fairly easy to track software pricing and it has been remarkably stable for the last 11 months with the market consolidation. You can look at the PE multiple for Mindscape, look at the price to sales ratio, Mindscapes operating margins were headed in the right direction -- if you look at the price to sales on mindscape that tlc paid and apply tlc's operating margins, tlc paid a very fair price. TLC is still only an 18 multiple on 1998. As the balance sheet cleans up and investors want a way to play the demographics, pc price wars without asian or y2k exposure, I suspect we'll see TLC in the 30's or even higher over the next 12 months. Sub zero pc's aren't the holy grail, but ON THE MARGIN added pc penetration is great for tlc. All that matters in a stock price is change on the margin - in general for tlc the trends are in tlc's favor. Moreover, institutional investors are pursuing a "flight to software." I think the reason this thread has been so aggressive about some of the negative views is that they are often filled with outright lies and manipulation of facts. TD

To: Peter Goss who wrote (4471)	4/11/1998 10:42:00 AM
From: Fred Fahmy	Read Replies (1) \| Respond to of 6318

Pter, <1) The thread psychology should be a warning sign. Everyone is so excited that everyone with a different view (factually based or not) is treated with contempt.> Everyone?? Everyone is basically one very desperate short who is using different aliases to spread blatant mis-information. JOHNNY DOLLAR has had differing opinions but has not been treated "contempt". <2) The stock has doubled in a short time (fundamentals have not improved that much)> Fundamentals have improved tremendously. The Thomas Lee deal helped the balance sheet immensely. In addition, they have gained access to such huge names as Disney, Sesame Street, National Geographic, etc. Finally, the fact that the stock was so ridiculously undervalued in the past has nothing to do with future prospects. Finally, in just a quarter or two the large write-offs will be finished. This will make the company's financials much easier to understand and more attractive to potential investors. <3) Every analyst is scrambling to upgrade - they are always late. If any of you can remember the mirror image of this scenario, when TLC was $10 and falling, then you will understand.> The weren't that late. Many changed their tunes in the high teens or low 20's. <4) The low priced PC is not the holy grail - the price elasticity argument is not valid. I don't think PC penetration will ever get close to what people expect. "Ever" is a little extreme. The same thing was said about telephones, autos,TV's, microwaves, VCR's in the past. PC's will become as common as TV's it's just a matter of time. Of all your arguments, I find this to be the weakest by far. <5) Software is and will continue to be a brutally competitive market with shrinking margins.> Consolidation within the industry will continue to help pricing stabilize. This is not a new concept. As consolidation continues the big winners will have much more control over pricing. In addition current margin percentages are obscene and there is plenty of room for margins to come down. Finally total margin DOLLARS can still increase even if percentages are coming down as long as revenue is growing sufficiently. Margin dollars are the key not margin percentages. <6) Growth by acquisition has blown up on TLC in the past. Buying growth right now is very expensive, and management has not shown its saavy in the past. They have been correct strategically but not financially.> This is not "the past" This is the future and the last two major deals (i.e. Creative Wonders and Mindscape) look very healthy from a financial prospective. Keep in mind that the BOD is significantly changed now. I doubt you will see ANY acquisitions which are any less than "saavvy" with Thomas Lee and Co. having their say. <7) 20x earnings is way too much for this company given the nature of its business and its management. This is not MSFT.> "This is not MSFT".......and 20X is not 60X. What's your point?? The average software company has a P/E somewhere in the 30's. Compared to others companies in their industry segment, 20X is still cheap. For the record, I also currently have no position in TLC but will continue to follow the company. FF