Wednesday, March 30, 2005


This is a congratulations to Jonathan blog. Jonathan purchased ADBE (Adobe) after hearing my take on the company. He is on a bucking bronco and enjoying a great ride. The stock continues to move up even after down-grades by a number of analysts.

The Morningstar report gives one a good sense of the problem. The stock has done extremely well and trades at 30 times next years earnings. It is within a stones throw of its all time high which was made during the internet bubble. The Morningstar analyst is impressed with the growth rate and with the "double moat". I too am impressed with the "double moat" which is a knowledge moat and a network moat. The knowledge moat is simply that students are trained in the usage at graphic arts schools around the world. The networking moat is that there are 500 million users.

One part that I do not believe the analyst appreciate is the tie-in with YHOO. YHOO is providing search services and promoting the product line.

Thank you Jonathan for buying and holding. I enjoy seeing folks make BIG MONEY!

The stock is an expensive stock based on price to earnings ratio. Growth in the current market is under-appreciated. I envision a relatively high grow rate for many years, hold on to this winner and do not let go!