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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (53141)	3/12/1999 6:27:00 PM
From: Mao II	Respond to of 97611

NW: I think we are all running around in circles on this one. It is becoming tedious. These guys in Houston will warn or not and hit or exceed or miss earnings. And at the moment, no one here has enough info to say with certainty want its gonna be. I've made my bet that this is the bottom and that the market is not going to correct before we are up off of the mat and on our way. Others may disagree. I know that. We have gone around and around on this. My god, we were even sleuthing out origins of press releases the other day like a thread of gum-shoe wannabes. To top it off, we have SI bashing us for blowing a little steam. I say the time has come to STOMP THIS PORKER BUT GOOD. WHIP IT INTO LINE. AND MOVE ON TO DISCUSSION OF other CPQ related matters. Like the best way to prepare savory pork pie. M2

To: Night Writer who wrote (53141)	3/12/1999 7:03:00 PM
From: rupert1	Read Replies (1) \| Respond to of 97611

Ok, everybody. One last shot for the day at rational optimism. In the last two weeks - possibly 1O0 million shares have been sold on a down tick. Possibly 80 millions shares have been bought on those same downticks and on a few upticks. (You can figure the numbers yourself). Savvy institutions as well as individuals and day traders have been involved on both sides of the action. They are all betting on the volume of sales and profits for this quarter and the year. GOODNIGHT FROM THE CENTRE OF CIVILIZATION MSFT, DELL, GTW, HWP and CPQ have all said that volume of sales are seasonally soft, as usual, but they are comfortable with analysts original consensus estimates for the quarter and the year. INTC has said that it has no intention of giving downward guidance. Those original estimates were boosted a little more than they should have been given seasonal slowness because analysts believed that there would be extra sales this quarter due to YK2 compliance purchasers. When analysts realised that the first few weeks of this quarter were exhibiting the same seasonal slowness as normal, they got to thinking that they had expected too much from extra YK2 sales. So they went into a blue funk. The cries of "fire" where magnified by the media who love a good story, then there was a bear raid on COMPAQ, in particular, because it is a big liquid stock with a recent history of 20-30% drops. This is not to say that YK2 compliance will not have produced extra business in March or will not produce extra business for the rest of the year. Although there is obviously a danger of downward momentum from panic, or from the absence of convincing reassurance, there is also a great potential for an explosive upward surge because shorts will have to cover once it turns up and an awful lot of people are trying to guage the bottom before jumping in. Today was an example of what might happen - strong buying throughout the day, against the trend in the sector. The sell-off was eminently predictable given the number of day traders who want out before a weekend. The slight downward close was negligible. The stock is recommended as Hold by a few houses. All the others recommend it as a BUY, some of them as a STRONG BUY. Many of the BUYS and STRONG BUYS were at the price of $40+. The p/e now is 17/18. It is below the conservative growth rate of 20%+. It gives no premium at all for AV (which Kumar thought entitled it to a higher premium). Talking of Kumar, he recommends it as a Buy in the mid 30's, Niles recommends it as a Strong Buy and one of his top picks. These two are among the most critical and skeptical of "investigative analysts". Finally, Cramer, shell-shocked and loosing money, as usual, is looking for a quiet life out of techs. He is short COMPAQ That is the most convincing reason I can think of to recommend - wait for it - a STRONG BUY. Yes, you heard right, I am REITERATING, STRONG BUY. The overall market will be skittish at 10,000 but will not undergo a massive correction at least for a few months. Even if it does, the downside risk to COMPAQ is already limited. A correction of 10-25% is still less than CPQ has already had. Concern that techs are not involved in this rally is good. As the other sectors become overbought, investors will turn to one of the few sectors that will give fast growth. The bargains among the techs will be compelling and the upward momentum will be swift. I think CPQ will start bobbing between 32-36 and will then struggle up into the 36-40 range by the end of March, beginning of April. It will have spikes to $45 before earnings. Subject to earnings and the synergy of the Innovate Conference and the AGM, it might spike to $50. At that stage El has to give me 100 shares for everytime he has criticised my rational optimisim since it hit $35. Disclosure I have a lot at an average of $37 (about half of whch was bought with my profit when I sold at $50 and $48). If I double up now I can get the average to $33/34. If it goes to $25, as El thinks it will, I can get my average down to $31 - which would be nice. So I am as intersted as the next man in whether it will go higher or lower.