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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (856)	5/16/1998 9:47:00 AM
From: Mike Farrar	Respond to of 4634

Check out DBCC Up from 4 1/2 to 8 in two months. Just came out with earnings after the bell Friday with .02 v.05 estimated. Revenues and earnings also declined. Will probably be a real good short to 5 by the end of next week, IMO.

To: Bill Wexler who wrote (856)	5/16/1998 10:24:00 AM
From: Bradpalm1	Respond to of 4634

Bill, Something is amiss with TRBDF. It's starting to smell like another TRII. Bradpalm1

To: Bill Wexler who wrote (856)	5/17/1998 9:33:00 PM
From: lindend	Read Replies (1) \| Respond to of 4634

Bill, >>Cyberguard has shown nearly zero growth quarter over quarter.>> I've taken a look at the latest 10Q, and you are correct about a pattern of ever growing SG&A. However, before I consider shorting this stock, I need to get a grasp on a couple of things. 1. From everything I've read, the company's products are technically solid. Is there something preventing adoption other than market inertia with Check Point and the other big players? 2. Sales growth did occur in units shipped (108%) and from a year to year standpoint (although this growth pales in comparison to SG&A growth). What indications do you have that this unit sales growth won't increase? Thanks.

To: Bill Wexler who wrote (856)	5/18/1998 3:22:00 AM
From: hasbeen101	Read Replies (1) \| Respond to of 4634

OFF TOPIC Bill, I have question that's off topic but relevant to analysing the financial statements of software companies. Perhaps you or some other person who understands US accounting standards could help me out. Her in Australia, the government has just changed the tax law so that software development costs must be capitalised then amortised over two and a half years. You can only start the amortisation after the project has finished. I am wondering what the requirements are in the US. We all know that it is a good practice for NASDAQ companies to expense their software development costs in the current period, and that generally only the scam companies take the option of capitalising software development outgoings (which makes their reported earnings look higher). What does the US tax law require? Can companies expense software development costs for tax purposes? Here in Australia, companies will be showing the outgoings as an expense on the financial statement, but not in their tax filings. Therefore the effective tax rate in the period in which the software project takes place will be artificially inflated (Similarly it will appear artificially low when the amortisation takes place as a book entry, even though no cash is going out the door).