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

To: tekboy who wrote (8791)	10/25/1999 7:36:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

tekboy, My question is this: if we have confirmed gorilla identity but the market has not yet cottoned on to it, isn't this the IDEAL time to bet the house? Wouldn't it be like jumping into Q in February rather than March, if one had advance knowledge of the Ericsson deal? I'm not saying I fully believe this, but I can't think of many good arguments to the contrary. While I think it's comparable to the Q in terms of a defining event that makes it possible for the entire market to grow farther and faster, I don't think it's comparable in terms of stock valuation. In the case of Q, the Ericsson deal also announced that the money-losing infrastructure business would be unloaded. We didn't know what the selling price was or how much money was being lost at the time, but we did have reason to believe the deal would be immediately accretive to earnings. Contrast that with Gemstar's situation in which most if not all of us are in a quandry about what this means to the bottom line over the next six months to a year. Until I figure out a way to value potential gorillas and established gorillas in a fairly precise quantitative sort of way, I'll always maintain some healthy skepticism about the price of the stock. It's my nature as a value investor who can't find any traditional value in stocks these days. :) --Mike Buckley