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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Mike Buckley who wrote (7413)	10/4/1999 2:20:00 AM
From: tekboy	Read Replies (1) of 54805

<<Because all of that has preceded the defining event, I have to wonder what will happen with [GMST] stock once the event has come to being. I really wonder if this isn't going to be yet another classic case of buying on the rumor and selling on the news.... The influence a defining event has on the price of a stock has a lot to do with the degree to which it is anticipated. In Qualcomm's case, I think the defining event was anticipated by relatively few investors. In Gemstar's case, the perception is more important than the fundamental of a positive settlement. That suggests to me that most of the investors already anticipate it.>> Interesting point, BUT--I submit that the direction of the movement will depend on whether the number of "old" GMST investors acting as you predict is greater or less than the number of "new" GMST investors drawn to the stock by the stories regarding the settlement. We sometimes tend to forget that the vast majority of investors out there have no clue at all about most of these obscure tech companies, and that the further increases in their stock prices will come at least as much from their getting "known" as from anything else. For example, only incredibly sophisticated types knew about QCOM pre-3/99. Sophisticated types learned about it during the course of the year. And unsophisticated types will learn about it in years to come. GMST is probably as obscure now as QCOM was nine months ago, so it should be able to count on lots of new blood coming in.... <<if I were trying to time Gemstar (which I'm not) I would probably wait for what I think will be a sell-off that takes place after the defining event.>> I'm far less experienced at investing than most of you and therefore should not opine on such subjects, but if one wanted to get in yet thought a sell-off was possible, wouldn't the logical thing to do be to dollar-cost-average your purchase half before and half after the announcement? tekboy@greed.com

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