AMAT gets a mention from Ron Elijah... Article follows.
Crystal-ball time
Wall Street pros hot on tech
By Thom Calandra, CBS MarketWatch
Last Update: 4:45 PM ET Nov 17, 1998 NewsWatch
LAS VEGAS (CBS.MW) -- Mostly, they were like kids in a technology candy store,
and deservedly so.
Andrew Neff, a senior managing director at Bear Stearns and a perennial all-star
analyst; Robertson Stephens fund manager Ronald Elijah, who runs the Information Age
Fund (RSIFX) and the Robertson Stephens Value-Plus-Growth Fund (RSVPX);
Integral Capital Partners' Roger McNamee; and Forbes publisher Richard Karlgaard
came to the Comdex trade show to talk stocks.
Their crystal balls were full of candy for technology investors. If this sounds too good to
be true, well, you just had to be there.
Appeal for calm on Y2K
Year 2000 problems? "I don't believe something that is talked about this much will hurt
us," said Elijah, whose three-year performance at the two Robertson Stephens mutual
funds he handles is among the best in the United States. Elijah said he sees Y2K
spending as an "incremental positive" for hardware makers.
"Who flies New Year's Eve anyhow?" asked Neff, who has been following technology
stocks for nine years.
How about Internet mania, which is sending fledgling companies' shares to skyscraper
heights? "Increasingly, it is individual investors who dominate trading in technology
stocks," said venture capitalist McNamee.
To be sure, McNamee, who took early positions in search-engine developer Inktomi
(INKT) and computer memory expander Rambus (RMBS), now calls them "hopelessly
overpriced." In an instant electronic survey of a Comdex crowd of about 1,000
watching the Wall Street pros, 69 percent said Internet stocks were "too expensive."
McNamee said Internet traders "live the Internet 24 by 7" and have a "very different
perception of risk than professional investors."
Oh, by the way, McNamee is still looking to buy more Inktomi and Rambus, once their
stock prices cool.
Lots of reasons to buy
What about Southeast Asia's flagging currencies? "Southeast Asia is important," said
Elijah. "It will come back faster than people expect. We need them to be buyers [of
tech products]."
The crowd came to hear these Wall Street professionals tick off reasons that we all
should keep buying high-flying semiconductor, software, hardware and
telecommunications stocks. And reasons the crowd got. (All of the experts' forecasts
came Tuesday before the Federal Reserve's policy-makers reduced U.S. interest rates.)
Karlgaard, the Forbes publisher, was most lucid in his reasoning. He spoke to the
conference by telephone after a travel hitch. "I regard Amazon.com (AMZN) ... as a
proxy for e-commerce," Karlgaard said. "Computer penetration in the world is low.
Telephone penetration is low."
Less than 20 percent of the world's 6 billion people, in fact, have easy access to a
telephone. The 300 million computers in the world leave 97 percent of the globe without
one.
Instant verdict
Oh, and that pesky Microsoft (MSFT) question kept coming up. In another instant poll
of the audience, 57 percent saw the world's largest software maker as "guilty of being a
monopolist," while 40 percent said no. The panel largely said it believed Microsoft, the
largest company at the Comdex trade show, has earned its place atop the technology
heap.
McNamee boldly predicted a federal judge "absolutely is going to find [Microsoft]
guilty" in the government's antitrust case. "The appeals process," he added, "will take
years."
Now, for the part that everyone came for: stock picks. Elijah, who is very careful about
how he is quoted in the financial press, said the business cycle for semiconductor
makers "is on a big upswing right now." He said he sees a shortage of DRAM chips
ahead.
Elijah recommended Texas Instruments (TXN), Micron Technology (MU), Applied
Materials (AMAT) and Novellus Systems (NVLS). He also said he sees yet another
rise in the stocks of personal computer makers. "The entire PC universe, including
Compaq (CPQ), ... will benefit from a full technology cycle next year," he said.
"1999 is going to be an exceptional year." See related story.
McNamee, browsing among "forgotten companies," plugged Platinum Software
(PSQL) and Flextronics (FLEX). "We are in year three of a 30-year Internet
economy," said McNamee, a former T. Rowe Price fund manager who now runs his
own funds from California.
The future's winning Internet franchises, he said, "haven't even been conceived
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