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

To: voop who wrote (6039)	9/6/1999 4:37:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Voop, Good for us. The market understands only snippets and most everybody I talk to (non-investment types) has no clue about the company at all. This is much more comforting than when my dry cleaner was telling me about Iomega. Exactly. Q may not lend itself well to investment metrics...again good for us, as long as they continue to surprise to the upside. But to look at trailing PEG is like driving forward through the proverbial rear view mirror, don't you think? Like I've always said, my biggest weakness is that I'm not much of a visionary. Using the unmodified PEG is the most conservative way of looking at a PEG ratio I'm aware of. I compensate for it by making different assumptions about fair value. If fair value for a small-cap stock is a PEG of 1.00, I tend to look at fair value for a potential gorilla as 1.50 and for a gorilla as 2.00. My simple mind likes the concept of taking the $5/shr forward earnings estimate and plugging in the gorilla multiples between 40-80x, which are now going even higher, according to Stan's report earlier. Mine too. As I've said twice in my posts on the other thread, I don't dwell on the PEG for a gorilla. The only reason I got caught up in the discussion is because there was, in my opinion, some misinformation being dispensed in the other thread. And as far as Cha2's comment about focusing on the qualitative fundamentals, I think that's the best advice any of us can follow when talking about gorillas. Forget the PEG ratios, the PSRs, and all the rest. On the other hand, if this raging bull market ever slows down, those ratios will come down too. --Mike Buckley