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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: red_dog who wrote (58607)8/31/1999 7:59:00 AM
From: HeatherN  Read Replies (1) of 120523
 
Robert,
Althoug I generally agree heartily with your analysis, I must offer a different viewpoint re: AG and your P&G example. If a product based company (as opposed to a service based company) experiences a setback in one area of the world or in one product line they have several options to maintain revenue. Increasing prices is only one avenue and it is difficult to maintain consumer loyalty in with a significant price increase. P&G does not offer unique products... consumers may choose other brands.
A second option is to increase market share in areas where it already maintains a presence or it can seek out new markets. New markets may occur either geographically or, by offering a new product in the same geographic areas.
Mature companies, especially those that are "goods" oriented rather than "information" oriented may find it difficult to grow using either of these methods. Most of the rapid growth we are seeing in the largest of the large caps are in areas of technology and information based services...IBM, AT&T etc.
It is unclear to me at this time whether or not AG is protecting us from irrational exuberance or just not fully appreciating the new economy. Time will tell.

Heather
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