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

To: Eric L who wrote (7412)	10/3/1999 7:47:00 PM
From: Mike Buckley	Read Replies (5) \| Respond to of 54805

Eric, The stock ran up quite a bit in the quarter preceeding the Defining Event, then took off like a rocket. Could happen with Gemstar. Relative to that, I've been wondering about something that I'd like to bring to the attention of the thread. In the case of Gemstar, the stock has recently run up significantly on no confirmed news. Instead, it ran up on the prudent reason to think negotiations are moving forward and will ultimately benefit the Gem to some degree that is better than what it enjoys today. Because all of that has preceded the defining event, I have to wonder what will happen with the stock once the event has come to being. I really wonder if this isn't going to be yet another classic case of buying on the rumor and selling on the news. If that happens, the selling will be no doubt relatively temporary in the big scheme of things. But the price could go deeply down before recovering. I'm not playing out this scenario in my head in some vain attempt to time the market. Instead, I'm suggesting that the influence a defining event has on the price of a stock has a lot to do with the degree to which it is anticipated. In Qualcomm's case, I think the defining event was anticipated by relatively few investors. In Gemstar's case, the perception is more important than the fundamental of a positive settlement. That suggests to me that most of the investors already anticipate it. That they also place undue emphasis on the outcome (my opinion) that also tells me that reaction won't be manifested in the stock price as positively as if the defining event was not anticipated. In short, if I were trying to time Gemstar (which I'm not) I would probably wait for what I think will be a sell-off that takes place after the defining event. That's a huge contast with what happened in the case of Qualcomm's defining event. Only time will tell. --Mike Buckley

To: Eric L who wrote (7412)	10/3/1999 10:17:00 PM
From: LLCF	Read Replies (1) \| Respond to of 54805

<It takes both a fundamental crossing of the chasm and a perceptual crossing by the market for the stock to react. The two crossings probably never occur at the same time. Merlin believes that the fundamental crossing for the Q took place a full year before the perceptual crossing. The market required a Defining Event (the litigation settlement) before reacting > Wait a second... it looks to me like the market new all along, Look how fast the stock caught up to it's new found status once Mr. market knew for sure Q had a proprietary position. Without the settlement it was unclear that Q's asic's were any different than what anyone else could make... Q went form chimp to Gorilla by virtue of it's patents. DAK