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

To: uel_Dave who wrote (8662)	10/23/1999 2:50:00 PM
From: StockHawk	Read Replies (2) \| Respond to of 54805

From SmartMoney - Info on MFST, INTC, CSCO, LU smartmoney.com THE STOCK MARKET'S GREATEST HITS -- NOVEMBER 1999 THEY ARE the giants. The titans. The biggest of the big. They are America's largest, most valuable -- and, one could argue, its favorite -- stocks. Microsoft (MSFT), General Electric (GE), Intel (INTC), IBM (IBM), Cisco Systems (CSCO), Wal-Mart Stores (WMT), Lucent Technologies (LU), Exxon (XON), Merck (MRK) and Citigroup (C). The market has rewarded this select group of 10 companies with an incredible runup in the past few years. While sizzling Internet IPOs may have grabbed more headlines, these bluest of the blue chips have gained an average of 54% a year over the past three years. Together, they make up nearly a quarter of the value of the Standard & Poor's 500-stock index, and this year they're responsible for more than half of the index's rise. All of which begs the question: What now for these stock-market superstars? Can they possibly continue their torrid run? Or are they about to fall off a precipice, like the supposedly can't-miss "Nifty Fifty" stocks did in the 1970s? We decided to find out. After reviewing the historical data, and after conducting extensive interviews with analysts, industry experts and the companies themselves, we've come to some conclusions about what's next for each of the market's 10 biggest stocks. History, we believe, tells us a lot about how the market treats its favorite companies. Take a look at the top 10 lists from past years that appear throughout these pages. You'll see that for every General Electric, which has endured at the top, there's an Eastman Kodak (EK), a former No. 4 that now ranks as the market's 109th-largest stock, a few notches ahead of Amazon.com (AMZN). The market's leading stocks tend to rise to the top based on what they've done in the past, not what they're about to do. Indeed, the companies on 1969's Top 10 list returned an average of negative 1.1% a year over the next decade. In 1979, in the midst of the Iranian hostage crisis, oil companies were all over the list, while 1989's greatest hits, on the eve of the technology boom, were devoid of tech companies, aside from IBM. (At the beginning of 1996, Microsoft was the only tech company among the 10 most valuable stocks.) Yet some companies do manage to scrap their way to the top and stay there. What's the secret? To remain a superstar, a company needs more than just a hot product or sector. It needs to adapt. IBM isn't just a computer maker anymore. It's a services and software company. At GE, nearly 50% of the revenue comes from financial services -- a long way from the home appliances and light bulbs that were GE's beginnings. "Those companies that remain on the list stay there because they understand where the world is going, and they're going with it," says Stuart Freeman, chief equity strategist at A.G. Edwards. No question, all 10 of the market's current favorites are richly priced. But which ones will be able to adapt, and which will fall by the wayside? Read on. [if you go to the web site above, there is a link for each of the companies mentioned] StockHawk