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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: hasbeen101 who wrote (10284)	3/31/1999 7:54:00 PM
From: John Wright	Read Replies (1) \| Respond to of 19080

>>>growth rate for any company has an asymptote: and that asymptote is the growth rate of the economy <<< Damien, I hate to be so candid and frank but I have to admit I never read such grotesque economic nonsense or reasoning in my whole life! Economic growth rate, as measured by a country's GDP, is based on the total value of economic output across many industries. Some industries grow at exponential rates, some at logarithmic, and some are in a continuous state of decline. In addition, some industries either account for a very small part or a very large piece of the total economic pie. Therefore also having varying degrees of influence over the final rate. To suggest Oracle's growth rate or any other companies growth rate is is somehow perfectly correlated or evetually must mirror the GDP rate is somewhat farfetched and ludicrous. Have you taken Economics 101 yet? Or have you just recently been introduced to capitalism and mkt. forces and need a bit more time? John P.S. Don't take it personally.

To: hasbeen101 who wrote (10284)	3/31/1999 8:01:00 PM
From: norm chin	Read Replies (2) \| Respond to of 19080

"The logic is extremely simple: if a company grew faster than the economy for an unlimited period of time, it would end up being bigger than the economy." True, the logic is extremely simple but you failed to add that it's flawed. Why? - The economy is complex and dynamic; the factors affecting it are constantly changing. - You seem to erroneously assume that the economy grows independent of businesses like ORACLE. Am I wrong in thinking that the health of an economy is directly related to the well being of the various business sectors? My understanding is that the economy is measured something like this: Economic growth (or decline) = sector1 + sector2...+ sectorN. where sector1 (or some index1) might be technology (eg ORCL) sector2 (or some index2) might be heavy industry (eg NUE?) sectorN (or some indexN) might be textile If the above equation is correct, how can any company gets bigger than the economy? What is true is that a company (like ORCL) or sector can grow at a rate FASTER than the overall economy but NEVER bigger.

To: hasbeen101 who wrote (10284)	3/31/1999 10:47:00 PM
From: Chris Anderson	Read Replies (2) \| Respond to of 19080

Mr. Laker said: "The logic is extremely simple: if a company grew faster than the economy for an unlimited period of time, it would end up being bigger than the economy. This is just a mathematical fact (and a practical impossiblity). Therefore every fast-growing company must hit this wall sometime." I think all of the business/economic folks missed the point. From a mathamatical standpoint, Mr. Laker is 100% correct. For an "unlimited period of time" (i.e. infinity) if a company grows faster than the economy, it will be bigger than the economy. Absolutely true! So, in 5 billion years, when the the sun supernovas, we may have something to worry about, until then, no problem. Conclusion: Mathematicians - 0 Economists - 1 Whimsically yours, Chris

To: hasbeen101 who wrote (10284)	4/2/1999 5:16:00 AM
From: John Stichnoth	Read Replies (1) \| Respond to of 19080

Damien, Just read your "asymptote" posting--and went to my dictionary. Amusing colloquy you all had over that. Another way of saying about the same thing is that all companies eventually revert to the mean. This latter expression is in very common usage (and shouldn't engender too much flack here). The issue to me is defining how far out you can take abnormal revenue and profit estimates (and PE estimates?) before using a general market growth/market PE. If you are confident that the company you're looking at can meet those goals, then you don't have to make assumptions out to 23 years. You can just accept that the stock will provide exceptional returns for say 5 years, or 3 years, or 7 years, and then will look like a regular stock. In 3/5/7 years you can revisit. A great example of people looking at an extended time horizon for superior earnings growth is CSCO, which has traded at such a premium to the market for so long--and which can still be justified as deserving the high PE. But, it won't happen forever. In other words, I agree with you. Best, John