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

To: daffydog who wrote (12811)	12/15/1999 6:48:00 AM
From: gdichaz	Read Replies (1) \| Respond to of 54805

Mark: You are right of course. It is absurd and very very bad business practice for the companies selling stock "analysis" to use earnings which incorporate one time charges. Any meaningful analysis requires backing out those one time charges as Mike has pointed out. I have argued that reports by companies should do this routinely (some of that is happening) and that others who sell analytical reports use those as the basis for there analysis. Some do, the vast majority do not. With a stock like the Q this absurdity sticks out like a sore thumb, but yawns result. It again shows how little professional interest the sellers of analysis have in their clients. Zach does back out these charges as I recall. I am quoting Mike from memory here. Hope my memory is accurate. Cha2

To: daffydog who wrote (12811)	12/15/1999 9:43:00 AM
From: Mike Buckley	Read Replies (3) \| Respond to of 54805

Mark, My point is that many, if not most people, will not delve so deeply into the screen to exclude one-time charges in their search for a value stock. I don't even know if there is a screen that does that. In my five years as a value investor, I've never used a screen. Instead, my research begins with lots and lots of reading about business. That's because I buy businesses, not stocks, if you get my point. Once I determine a few industries or sub-industries I'm interested in, I look at them from a value approach. Now that I'm armed with gorilla-gaming view points, I combine my traditional approach to value investing with my modern, updated, handy dandy gorilla approach. So far it's working. So far. When we search for the next Q, where do we look? Probably the best answer is at Qualcomm headquarters. :) Seriously, the first place to look is in industries where there are enablers brewing underfoot. The next best place to look is in industries where there are apps companies meddling around. But remember that no apps company will have the power of a Qualcomm because the Q is an enabler. I don't ever expect to see an "S" (for Siebel) in the universe that is 40 light years tall. The watch and wait portfolio doesn't seem to me to have a lot of stocks that a value investor would jump on. Considering the returns the average stock in that portfolio has had this year, that's a sad comment on value investing. There's no doubt in my mind that a thorough approach to gorilla investing would have whetted out more than a few of those stocks at the beginning of the year as having been truly undervalued. --Mike Buckley