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

To: LLCoolG who wrote (1731)	8/1/1998 11:32:00 PM
From: Chuzzlewit	Respond to of 4509

LLC, the heuristic of P/E equaling long-term growth doesn't make any sense because it neglects several of the underlying valuation determinants such as long term interest rates and riskiness of the forecasted growth. Also, programming stocks tend to have a premium over other industry segments. If you use my normalized PEG calculation (CNPEG) it appears that PSFT is a clear buy. My read of the situation is this. We have had disappointing forward-looking statements from companies like CA. The SCM sector has fallen on its derrier and PSFT has tempered its forward looking growth rate. Clearly, the street is discounting much lower growth in the next year or two (perhaps because of y2k focus by many companies). At worst this means that decisions to install ERP are delayed, not scuttled. I believe that the reaction on the street is over-blown, but it may take a quarter or two for the street to validate the idea that PSFT is continuing its robust growth. So, I'm looking to add to my position during this period as funds become available. TTFN, CTC