Cheers Roger - just as clarification for others, the only NZX position that I hold is PEB, which isn't risk-free either. Actually one of the biggest risks that I see for PEB is that the market may indiscriminately punish it, should XRO pop. So for me to state the obvious and say that XRO is more than full priced goes against my own interest. I only started looking into XRO because I was curious how these market caps are justified. Obviously the software is nothing special and the financials don't add up but I think I am starting to understand the hype. It's not just using buzz words. Xero doesn't offer just an incomplete and expensive accounting solution, they offer a community, a religious cult, where followers help each other and find purpose in life:
https://community.xero.com/business/topic/23/
The interactive group dynamic makes people blind or more forgiving to some of the obvious problems that Xero has. You don't have to be an accountant to tell that they got even the basics wrong. We've talked about the quotes, inventory, etc. You can get away with that here but it's a different story in the US:
http://www.linkedin.com/groups/Why-X...e_more-0-b-ttl
Meanwhile, Intuit devotes its resources to build this complete business solution cloud behemoth, which is way beyond Xero's means:
http://www.sleeter.com/blog/2013/10/...rating-system/
US accountants and businesses will not want a half-baked open-source project from New Zealand. I am not even sure if all Aussies will opt for the Kiwi solution when they have a cheaper option from Australia or the US. Intuit has survived far more formidable opponents and they have the playbook. Let's not kid ourselves.