Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Mike Buckley who wrote (7429)	10/4/1999 9:35:00 AM
From: JohnG	Read Replies (1) \| Respond to of 54805

M Buckley. Your bumbers didn't bore me a bit. That was just the kind of analysis I was hopeing you might publish. It also gives me pause as to adding new money. Your CTXS point is a good one. You very perceptively asserted that as investors find they are using CTXS at work, they will come to trust investing in it and placing higher values on it. You do spend a lot of time visiting all over SI--perhaps more than anyone else. That is the reason I wondered if you could shed any light on CREE's IP position. Or they just a few steps ahead of others. Somewhere I read a post on developing small high temperature electronic devices where weight and temperature were of concern--facinating, but some years off--and by then, if they have no IP protection, they may just sell out to GE or be overcome by competitors. JohnG

To: Mike Buckley who wrote (7429)	10/4/1999 12:38:00 PM
From: Zirdu	Read Replies (1) \| Respond to of 54805

<<Where they used a 13% discount rate, I used 20%. Some people will be shocked to learn that I used such a high rate but I'll defer an explanation, if it's needed, for another time.>> I would be most interested in the explanation. I thought that Warren Buffett used the 30 year bond rate (now 6.1%) for discounting future earnings to present value, on the theory that this was the best alternative "riskless" long term investment. It seems to me that 20% or even 13% are much too high, given current interest rates. As you say, using 20% as a discount rate certainly builds in a lot of margin for error.