A Random Walk at the Robbie Stephens Conference

(Andrew Stern is professor emeritus of journalism at the Graduate School of Journalism at the University of California at Berkeley. He is also an investor, and we asked him to take a random walk at the RB conference).

SAN FRANCISCO -- Attending a conference like the BancBoston Robertson Stephens Technology '99 Conference is like going to a candy store, without knowing which candies to buy. The candy store offers large and small boxes of delicacies, but deciding which ones might be good, or which ones you might actually buy or which ones might poison you is difficult.

There were more than 300 presenting companies spread over four days, each day starting at eight and finishing at five. Four companies present every half-hour, each having exactly 25 minutes to address the crowd. Presenters, usually CEOs or CFOs, face an NBA-like clock that, when it reaches zero, emits beeps that sound much like garbage trucks backing up.

How to decide which companies to hear? I looked at the program and decided I did not want to hear the big companies like Cisco (CSCO), Sun Microsystems (SUNW), Microsoft (MSFT) and America Online (AOL). They go to these meetings all the time; and if they had something new to say, I would quickly hear about it anyway. I decided to learn more about some of the smaller, less well known companies.

After attending a couple of sessions, it became clear that there was a new lingo at work here. Phrases like "Go big or go home," "You must decide if you are a rule maker or a rule breaker," "Nobody makes money unless you have a near monopoly" like Microsoft and Yahoo! (YHOO), "24x7x365" (that is, accessible at all times), and "Loyalty for Life" -- which is what Amazon.com (AMZN) is working on.

I heard CheckFree Holdings (CKFR) and liked what they had to say: an unlimited future in electronic check processing on the Internet. But when I asked an analyst who was sitting next to me about the company, he said it wasn't a good buy because Microsoft might enter the business. Checkfree CEO Peter Kight had said that Microsoft might enter the business, but hadn't yet processed one transaction.

I then heard E*Trade's (EGRP) glitzy presentation, then one from Ticketmaster Online-CitySearch's (PRGN) young CEO, who showed lots of charts. He said you could buy tickets for a seat at a basketball game on their site, and with virtual-reality technology, you would be able to preview the view from the seat, but that was still, err, in the lab.

As I sipped a cup of coffee between sessions, a bunch of analysts next to me said they all had to hear Peregrine Systems (PRGN), a hot company that offers "IT infrastructure management solutions." The room was overflowing, the charts pointed up (they all do, of course). I tried hard to understand what the company does, but CEO Stephen Gardner seemed to speak in another language: Large company managers were "addicted to infrastructure," and needed Peregrine's enterprise infrastructure management application software. It was only after he told us that the FBI was using this software, that I began to listen more carefully, deciding I'd really better learn more about this company.

More hallway chatter: I had heard an analyst refer to Preview Travel (PTVL), a stock I own, as possible "monster meat." I asked what that meant, and she explained that the company might not make it by itself, but might be attractive enough to be gobbled up by a larger company.

The next day I noticed that a female CEO was presenting for a company called TSI International Software (TSFW). It turns out that Constance Galley's company designs products for the enterprise software market. Its stock had more than doubled in a year, so I tried hard to understand what the company did.

Incredibly complicated slides appeared on the screen, and I vaguely understood that TSI helps integrate other software applications. Afterwards I asked Galley if she thought many in the audience understood what the company did. She laughed and gently put her arm around me, and said, "Oh, I think a few analysts who work with us do." I felt much better.

I trudged on to Verio (VRIO), a company that provides business Internet services to small and mid-sized businesses. The CFO, Peter Fritzinger, was very young and dapper -- all his charts were also heading up -- and I decided I liked him but would have to do more research on the company to know if I liked it as an investment.

By now I was too tired to move, so I decided to stay for the next presentation, a company with the appealing name of Digital River (DRIV). Suddenly there was a huge rush of people entering the room, and I was glad I had a seat. The company's stock had a 52-week range between 5 and 61 3/8, closing at 38 1/2 Friday. Digital River makes it possible to download software on the Web directly onto a computer.

Now this is something I could understand. Standing not far from me was Ron Elijah, manager of a couple of Robertson Stephens mutual funds (RSIFX)Information Age and (RSVPX)Value and Growth. After the presentation, I asked him if he had ever heard of Digital River. He said no -- but that there had been such a huge rush to get in that he thought he should check it out.

Maybe this was the phenomenon that an Iowa hedge fund manager had told me about. He said he sometimes decides to buy a stock because he "feels the energy flowing into it." I asked what it felt like, and he said: "I know it when I see it." Sounds like the Supreme Court's definition of pornography.

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