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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Will Hou who wrote (4012)	7/19/1999 12:59:00 AM
From: Uncle Frank	Respond to of 54805

Welcome, Will, and thanks for the comments about LEAPS. There is a lot of interest about them on the thread right now <it was my weekender topic>. With regards to qcom's primate status, we deem them a Gorilla because of their unassailable ipr position on cdma, which is clearly a tornado market based on the growth in adoption rate. Several forms of cdma have already been recommended by the committee which is attempting to select the 3G standard for wireless voice and data. GSM has a stronghold in Europe, but has already lost the battle in the Americas and many other parts of the world. Q has leveraged their strength in cdma to become the 2nd largest hand set provider in the USA, trailing only Nokia (whose numbers are based on cdma, tdma, and gsm sales). As well, qcom has a thriving business selling one chip asic solutions for cdma cell phones to the other manufacturers. With regards to the csco/lu face off in the voip space, it's a battle where neither side may claim victory, but both will win! The sector will be so large that there is room for both to profit. Lu is much larger, and the ruling monarch of the telephony sector, while csco is more agile and is the Gorilla of the networking sector. Play them both, but f you have to choose 1 of them, ponder the quote I picked up recently about this battle: In the old world, the large ate the small; In today's world, the quick eat the slow. Frank

To: Will Hou who wrote (4012)	7/19/1999 1:23:00 AM
From: Mike Buckley	Respond to of 54805

Will, Is it a gorilla because it's dominant role in CDMA market or CDMA will be dominant in cellular industry? At the least, because of the former. At the best, also because of the latter. CDMA is doing best in the U. S. and has terrific prospects throughout the rest of the world. --Mike Buckley

To: Will Hou who wrote (4012)	7/19/1999 1:51:00 AM
From: JRH	Respond to of 54805

Also, any thoughts on the upcoming collision between LU and CSCO? What would be a good strategy here? Hi Will: It is my personal opinion that the best strategy for the upcoming battle is to take a position in the gorilla (CSCO) and to hedge that with some LU. Personally, I think that when this market takes off, there will be plenty of dollars for both of these to profit, and LU is indeed collecting quite an arsenal of data networkers. But, I can't help but think that what they are still missing is the IP expertise that CSCO has. I think that convergence, initially, may be dealt with with a combination ATM and IP, but eventually, once QoS over IP is established, it will migrate to IP only. And I think that CSCO is already addressing this, whereas LU is trying aiming for the current demand, which seems to be ATM (as evidenced by their purchase of ASND) for the most part. JMO, though. BWDIK, Justin

To: Will Hou who wrote (4012)	7/19/1999 7:06:00 AM
From: gdichaz	Read Replies (1) \| Respond to of 54805

To Will Hou: Thanks for the info on LEAPS. Having bought some Q LEAPS a little over a year and a half ago, I am just beginning the process of deciding what to do with them prior to Jan 2000. There are many options (alternatives combinations of actions) possible. Fortunately all are profitable - but some more so than others of course. Any ideas you (or anyone else) have on this "problem" welcome. Cha2 PS When you consider LU and CSCO, suggest you consider NT also. NT is the Rodney Dangerfield of this thread. But if you take a serious comparative look at NT, LU and CSCO, for example, where there was major head to head competition for future business with Telestra in Australia recently, suggest you will find that each has advantages and all three are probably excellent investments, since the growth possibilities for each within the converging networking/telecom market is very positive.

To: Will Hou who wrote (4012)	7/19/1999 8:39:00 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 54805

Will re: LEAPS, Thanks for expanding on what I said and making some corrections (I was hoping someone would do that!). One question: I was under the impression that the delta for in the money calls is pretty close to 1. As calls go (hopefully, from the perspective of the owner) deep into the money, it makes sense that there would be something of a drop in the delta, insofar as there is probably less demand for deep in the money calls which require greater capital outlay for purchase. But obviously (I thiiink) the delta cannot fall off 1 so far that a significant rise in the stock price knocks the time premium to zero or negative. If that happened, I would think people with smart stock screens could just arbitrage by buying calls and executing them and keeping the negative premium difference. Can you clarify on this issue? In any case, the greeks (delta, etc.) is stuff I definitely need to learn more about. Thanks also for your tip on the Option Council toolbox; I will definitely check it out. Best, Greg