Jill,
Don't feel like I'm trying to nit-pick when I respond to your post. Instead, I'll try to offer some helpful persective.
Unfortunately for them or for me, a few of the stocks they recommended in their DRIP did poorly for me (Coke and Exxon) and this annoyed me.
Their DRIP Portfolio is a long-term investment plan that has been in existence for a very short term. It's far too early to judge the managers of the portfolio. I never studied the criteria for selecting stocks in it, but my guess is that the stocks with which DRiPs are available probably don't offer the growth opportunities of the stocks we're discussing in this folder. Just as the Fool's Rule-Maker portfolio is not expected to match the returns or the risk of their Rule-Breaker portfolio, my guess is that their DRiPs portfolio falls in a category closer to rule maker than rule breaker.
Also, and this is where some will say I am being nit-picky, the Fool has never, ever recommended a stock. Instead, the Fool shows the investing community the processes and tools used to build a particular portfolio with the idea that investors will learn how to use those tools to their advantage. It's corny, but the Fool teaches us how to fish instead of giving us the fish.
I understood the intent of the PEG, but as you point out they can't be used in a vaccum. In fact, much of the time I wonder how often they really are used!
My biggest criticism of the Fool is that they use valuation tools less and less. I find that especially ironic because it was the Fool who taught me how to do exactly that in 1995. It is the Fool who I blame for becoming a valuation junkie and I wish they would convert more people into valuation junkies as they used to do. I think the world of David Gardner but I cringed when he wrote that he is less concerned about valuation tools than in the past. (I do know their Boring Portfolio has been a staunch user of valuation tools but it's falling on deaf ears to a certain extent because it has not been one of their more successful portfolios.)
I began to feel that stories were the engine of stocks, and there was so much information, so many stories around today, particularly on CNBC which I almost never watch.
You're right, of course! Always remember Gorilla Game Rule #10: Most news has nothing to do with the gorilla game. Ignore it.
To get round to ITWO again--it seems to me the story on the ARBA thread is worth listening to. Not necessarily investing in today or tomorrow, but watching closely.
For all I know, it might be worth investing in today. I don't have an informed opinion. All these companies are worth having on our radar screen. When the Ericsson deal was announced, I was grateful Qualcomm had been on my radar screen for a couple of years. Otherwise I might not have grasped the full implications of the information.
One of the things that DOES confuse me is the debate in that basket about switching costs. Sometimes I wonder if it matters--nobody switches from INTEL to AMD because INTEL cornered the market.
Actually, more and more companies are switching from Intel to AMD for at least a portion of their product line. Intel hasn't "cornered" the market in the context that I think of that word. They have dominated it but that's not the same. In the earlier days Intel always had the lead to market because they brought out next-generation processors before AMD ever did. (Lately Intel has lost the edge in that.) Intel used their incredible manufacturing efficiencies to market advantage, allowing them to raise and lower prices at will, an advantage not shared by any of their competitors.
The reason "Intel Inside" became so important is because Intel used it to instill FUD among adopters, that if they bought a box without Intel it might not work. Well guess what. The very first box I bought for the explicit purpose of using Windows was a total disaster for a year until I found out that the Intel microprocessor was known not to work well with Windows. Now that people are beginning to understand that FUD is mostly a myth, Intel is having to reach out into other markets to maintain their business.
Looks like Qualcomm is doing the same w/ CDMA. But in this arena I don't honestly have enough inside savvy to know whether that debate is meaningful.
The issue with CDMA is simply that no company has been nearly as successful as Qualcomm in innovating on top of the initial technology. It's not that others haven't tried. For whatever reason, the Qualcomm engineers have out-engineered their competitors. It's a truly superior product from what I've read.
'Nuff said. I'd probably be a wiser investor if I was a FOOL, but...
There are lots of ways to make money in the stock market and the Fool big whigs are the first to tell the world that. Their's is not the only way. For what it is or isn't worth, everything I do, included here in this folder, is rooted in the tenets of Foolish investing and I suspect always will be. For those who don't understand the intracies of Foolish and Gorilla-gaming investing, Gorilla-gaming fits perfectly within Foolish concepts.
--Mike Buckley |
