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

To: chaz who wrote (9961)	11/8/1999 10:22:00 PM
From: straight life	Read Replies (6) \| Respond to of 54805

"CREE HOLDERS" The article that you quoted so heavily from sptimes.com is indeed interesting, but, from my point of view, runs counter to GG thinking (at least to my way of looking at it). While there's a bit of a schism in current GG thought between either buying the initial basket or buying the biggest, fastest growing company in the market, the bright lights going on for me (pun intended) was: DON'T BUY THE ALSO RANS. As in: don't buy AMD; buy INTC. Now I'm not saying that it's totally analagous, or that CREE has the same advantages over UTCI that INTC has over AMD (although they might; supposedly CREE has great IPR). But prior to GG I'd always look for a cheaper stock as a good value investor, using traditional value metrics, like the one you quote: "UTC pe is 20, Cree pe is @75. However when you buy a cheap company, you often get a cheap company:"First products due to ship in January, slippage from original plans for September." Versus CREE's plans to expand capacity 6X this year alone. You see, I used to buy cheap companies. I didn't realize the unconscious arrogance I was exhibiting, which was: ok, I work in a tv studio, but I know value better than the professional investors who do this full time for a living. So, I'll just buy this struggling little company that the market has decided will have poor access to capital; which in turn means poor access to markets, materiel and top management. And then I'd be amazed when the cheap companies gave me cheap returns! Like I said, the scales fell from my eyes when I read the manual. So I'll buy the gold standard. And I'll pay the current price of gold. You can buy plastic. But don't be too surprised if it tarnishes or melts (or slippage goes beyond January etc.) And of course, no offense meant to any.