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Technology Stocks : Egghead Computer (EGGS) -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (3047)	10/22/1998 11:01:00 AM
From: James H. Irwin	Read Replies (2) \| Respond to of 8307

I doubt/know its not me, but you must consider that PM's (Portfolio Managers) aren't doing any deals (IPO's) but rather are looking at businesses that make sense, valuation-wise. $60 million in cash = buying the business for $7x24.3 shares = 170M - $60M = $110M. That is less than 1 times proforma revs. I think they did 64M for 6 months, and the growth is coming still. I don't think you need to be a rocket scientist to figure that this stock could go higher. But what we know is not necessarily known or cared about by those who can pull the trigger with the big bucks. That is why these conference attendances are important for small companies. If one PM likes the story he tells a buddy, who tells a buddy, you get the picture. Also, I'm sure if Orban had bad news to disseminate he wouldn't bother getting in front of a bunch of $$$ and get his head kicked in...would you? So the question remains why consider EGGS, and I say why not? I mean, how much AMZN do you need to own at $5.7 billion dollars. Why not diversify a bit down the food chain. It's more about risk/reward now than just chasing every stock going up. LTCM took care of that (Long Term Cap Mgmt). Also many PM's now are (I would wager) younger than the mean age of those observing this thread. These guys depend on their research salespeople to keep them up and they do the herd thing just like the rest of us lemmings, everyone is a hedge fund these days and if these PM's think they can make a quick hit, they'll bite...no questions asked. And most importantly now, all the "little pieces of crap" are working, and so the money continues to flow that way (witness the Russell 2000). Now the real question, is when to scale back a bit. I loaded up rest yesterday at prices above the low. My plan: keep a core position and trade when the stock gets too far ahead/behind itself. I think we'll base hera a bit, and then take off again Mid-November as the "January effect" kicks into gear a bit early. To all good luck, and never fall in love with a company. After all these are just sheets of paper/electronic entries under your SSN (Social Security Number). Gotta get back to making some $$ before I go play golf. Bon Chance.