Excerpt from Barron's
Winning Big
Why TCW's Glen Bickerstaff loves the stock market's generals
By BARRY HENDERSON
So the market is being driven by a smaller and smaller group of stocks with huge valuations. Glen Bickerstaff isn't worried. In fact, he sees a certain logic to this "winner-take-all" phenomenon -- and he's betting big that it will continue.
Bickerstaff, who runs the TCW Galileo Core Equity fund, contends that the best companies in almost any industry are extending their lead and that those with a true competitive edge deserve a healthy share-price premium. The best companies are seriously competitive outfits getting a lift from deep-seated changes in the economy and consumer behavior -- "secular changes," in Wall Street-speak. "That's why I own Intel, not Advanced Micro Devices; it's why I own Dell Computer, not Compaq," he says.
That's a nice explanation -- maybe even a rationalization -- for owning the generals of the market like Cisco Systems, Microsoft, Dell and Intel. But doesn't Bickerstaff risk falling in love with momentum-powered highflyers that quickly could crash back to earth? The fund manager thinks his fundamental analysis provides a safety net.
Top 10 Holdings
Company Percentage
of Portfolio
Cisco Systems 7.3%
Dell Computer 7.2
Charles Schwab 6.3
Home Depot 5.5
Intel 4.9
Microsoft 4.9
Applied Materials 4.7
Mirage Resorts 4.4
Kansas City Southern 4.1
Progressive 3.9
Total 53.2
For now, Bickerstaff is betting on companies like Cisco -- which accounts for the fund's largest single position (7.3%, according to the most recent available data) -- Dell and Lucent Technologies, which all make computer or telecommunications devices that power the 'Net.
--------------------------------------------------------
Comments: Another idiot who doesn't pay attention to jach, the most influential network analyst on SI. This guy obviously didn't do his homework. Otherwise he should have owned COMS, FORE.... |
