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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: j g cordes who wrote (21172)	7/27/1998 2:03:00 PM
From: John Mansfield	Respond to of 31646

<< Are you saying market cap should equal "profits" over the next two years? No company would meet that criteria. IBM's won't profit its market cap of $116 billion ORCL won't profit its market cap of $ 25 billion MSFT certainly won't profit its cap of $ 278 billion Nor will TAVA cease to exist after 2000 and only be the worth of its core business. Indeed its core business has become the Y2K business and the opportunities they will provide going forward. >> Good answer. This rebuttal disqualifies Calculated Risk for serious stock price discussion IMO. John

To: j g cordes who wrote (21172)	7/27/1998 2:27:00 PM
From: Don Westermeyer	Respond to of 31646

Are you saying market cap should equal "profits" over the next two years? No company would meet that criteria. I'd amend that to include book value at least. Not that I'd want to argue that that's a good measure of value either - look as MSFT. Of course TAVA is not MSFT nor should it be compared to any other large cap tech stock that is a 'leader'. Actually a lot of profitable companies (especially small caps) trade below book value. Check out the steel or energy related sectors - they are very out of favor right now. Eventually the Y2K sector will be out of favor too.

To: j g cordes who wrote (21172)	7/27/1998 3:06:00 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 31646

j.g, you are close! A profitable windfall opportunity is great! Congratulations to TAVA. But of course investors need to value the windfall appropriately. You wrote: "Are you saying market cap should equal "profits" over the next two years?" Answer: NO! Please reread my post. The market cap attributable to the windfall opportunity should equal the "profits" for the windfall opportunity! ( Note 1) This is a basic concept and IMO is key to understanding why TAVA's price will be substantially lower next year. The market cap for the ongoing venture needs to be evaluated separately. If you reread my post, you'll notice I separated these two calculations. This is why your comparison to IBM and MSFT does not work. As an example, any bubble opportunity at IBM is dwarfed by their ongoing business. The opposite is true for TAVA (the bubble is large!). Regards, Bill (Note 1) Actually, for a windfall opportunity, the market cap attributable to the opportunity should equal the discounted Free Cash Flow from the opportunity - "profits" is just short hand!