To: Mohan Marette who wrote (2458 ) 3/25/1999 12:49:00 PM From: michael r potter Respond to
Similarities, then and now. Up until 1993, SFE was stuck in a trading range of app. $10 to $18 for years. It finally broke out in early '93 and went to the equivalent of $276 in a little over three years. At the breakout time, SFE was just about to bring out a host of exciting companies through rights offerings after a drought of several years. Now: SFE has been in a trading range of $17 to $46 for almost 3 yrs. They have had a drought of good offerings the past couple of years, no offerings for a year. It finally broke out of that trading range recently over excitement in their interest in internet companies, the most exciting area of investments currently. Then: It was very difficult to see how fundamentals could possibly justify a 15X move in SFE in just over 3 yrs. Now, the same is true. If CMGI can go up 40X in less than 2 years, is it possible that SFE will go up some multiple of of its breakout point? If it does much worse than it did last time, say 5X over 3 years, instead of 15X, that would be 5X$47=$235. Will it do that or more? Of course no one knows, but it would be surprising if the recent high of $73 is THE high. That would mean SFE couldn't even muster a double of its breakout point of $47. I am going through this after realizing how similar my feelings are now to those in 1993. Then I had a large position at the breakout point, and started taking profits after double, triple, because fundamentals did not seem to justify the price. Now, it is my largest position, and started taking profits close to $70. Have this nagging feeling that this was a good move for a short time only. Looking back in a year or two, might be shortsighted. Fundamentals do not seem to justify a price currently in the $60s even to me. BUT,,,that voice within says that SFE is going to pull off a move before this is over that will be as surprising as in "93 when it broke out and went on to a 15X. Maybe not 15X this time, but a lot more than a double which would be $94. I think I have heard SFE enough and know them well enough that they would tell anyone that their pipeline has never looked better. The above thoughts are to stimulate thinking, I don't expect everyone to agree. Mike
