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

To: Rick Kupcunas who wrote (2804)	10/16/1998 10:41:00 PM
From: Rick	Read Replies (2) \| Respond to of 4509

I agree with Chuz' regarding the lack of credibility of the investment houses, and by extension the even further lack of credibility that those wishing to support their own bias point to the supposed beacons of knowledge. Since spring of this year I have been shorting Cambridge Technology Partners for some well defined reasons which I shared with the SI thread and Yahoo thread. It marched from the mid 40's up to 58, as the investment houses continued to pump it with their highest reccomendations. As it was tanking from 58 down to a low of 13.5, I continued to share what I considered to be obvious warning signs from the fundamentals. But sure enough at 45, 40, 35, 35, 20, etc. the investment houses continued to reiterate their strong buys, one of them even had the gall to call it their "top pick" twice on the decline. Sure enough, instead of discussing the company prospects and fundamentals, many of the posters simply thought it was enough to tell everybody what the latest upgrades were - absolutely leading the lambs to slaughter. And of course, on the day of greatest panic, just as the stock is around fair value, a few investment houses downgrade it - absolutely phenomenal. Anyway, my point is that the investment house recs are not well correlated with performance, and certainly not representative of how they are betting their own money. And I certainly agree that anecdotal discussions of how vast a sum of shares Goldman Sachs might have sold for itself or others on any given day is useless without really understanding what was happening: GS accounts selling ? who ? how much ? GS trading operations selling inventory ? selling short ? driving the price down during a period of panic with hopes of loading up at lower prices and selling into a earnings report rally ? Anyway, obviously we don't know the answers, so to place any weight to these ideas as a basis for buying or selling PeopleSoft is silly. Anyway, nobody knows for sure, but I expect and am hopeful for a very strong week next week. Either way, PSFT is a long term winner, so any further drops are even better buying opportunities in from where I sit. Rick.

To: Rick Kupcunas who wrote (2804)	10/16/1998 10:59:00 PM
From: Melissa McAuliffe	Respond to of 4509

Rick, Could you tell me why you feel SFA is a tougher market than the ERP market? Thanks. Melissa

To: Rick Kupcunas who wrote (2804)	10/17/1998 12:21:00 PM
From: TomT	Respond to of 4509

Rick -It is true that few can implement and maintain upgrades to their mission-critical systems like PSFT. And the recurring revenue they will see in upgrades is decent. But the company is not growing at its 100%+ rates it did in the early 90's because like I said, their are only so many Back Office accounting type systems to automate out there (though if they expand overseas, this could change). Their growth rate is in the low 30% range which makes its price equal to about its growth rate (.66 98' - .91 - 99'). The price is about where it should be. Respectable growth, but nothing like we saw earlier this decade. Why is Rambus (RMBS) priced at $61 with a PE over 200 and earnings less than half that of PSFT? Becuase their growth outlook over the next five years is projected to explode SFA is difficult to implement as sales business processes are not as straight forward as A/P, G/L, etc. Check out www.gorillagame.com (excellent book that highlights this next growing sector of ERP in its case study). But the number of companies that need these types of systems is similar to the number of companies that needed the types of systems PSFT provides in the early 90s. A huge market out there in which a lot of new players are going after - ORacle, Sap. As for SMOD - "Smart Modular Technologies, Inc. is a complete end-to-end provider of memory modules and memory cards, embedded computers and I/O products to leading and emerging high-tech OEM companies in the computer, networking and telecommunications markets" - This is out of their prospectus. They do not make memory, they make over 900 products, with memory modules (memory slapped on to a circuit board, making up a good piece of their business). Sticking with companies that have many products means that they can respond to the needs of the market place much safer as new growing products are added while slowing moving products are removed. Let's face it, A/P, G/L, G/L, etc is not an explosive growth area.