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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Stock Farmer who wrote (49398)	12/9/2001 3:22:34 PM
From: Bruce Brown	Read Replies (1) of 54805

whew... yours was a long post. That wasn't long for me. Absolutely! We are fully aligned on the important decision. Although I would suggest it's not "Whether" ABC "or" XYZ, but all of the above, plus more. And in balance. It is the whole coin we are flipping for :) Fair enough. We want to know all the dirty laundry and pimples as well as possible potholes in the road in addition to what the company does have going for itself. Then we want to know what the heck the market is willing to pay for both sides of that coin. But it is hard to shell out extra for growth that a CEO says "will be there... but we have no visibility". Which is indistinguishable from wishful thinking. No need to agree that too many management teams did not forsee the slackening demand and failed to adjust quickly enough. Those that had weathered previous storms in other business cycles were more "in tune", but that didn't stop the drop off in demand. Siebel - in terms of a management perspective - seems to have been quick to adjust. When the drain plug was pulled, Chambers and team didn't do so well on getting the shampoo rinsed off and the legs shaved before the water drained out of the tub. I'm sure many lessons were learned in the past two or three years. But I suggest to you that this is irrelevant except to those who actually established long positions on exactly those prices and still hold them in these distant future moments of comparative evaluation. Fair enough, but somebody was buying at or near those prices. I personally did some shopping - both in tech and outside of tech - based on a combination of factors included fundamental and technical set ups. And we should be intelligent enough not to enter the zone of meaningless past hypotheticals. I thought that zone was entered long ago. Although your response was interesting, as figure skating goes, I am more interested in your answer than that you could answer it. Feel free to give a stab yourself into "predicting" the length and strength of individual technology adoption life cycles, the target market the product(s) addresses and the possibility of what type of contraction and expansion phases the economy will go through within the course of the life cycle to come up with the reality that when dealing with IT, the spending continues through the entire business cycle, but not at the same degree in the late contraction phase as the late expansion phase. Now nail a multiple on that moving target and dial it in. Even if I believed that the market was predictive, a more important question back to you would be: what makes today's market a better predictor than it was in January 2000? How about "third time's the charm"? ;-) January was false. The spring was false. This could be false as well, but a lot of other indicators are in line this time around that were not in line during the previous two. Regardless, the market will eventually get it right and discount the turn in the economy. BB

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