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

To: 100cfm who wrote (12971)	12/19/1999 10:23:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

100, Your very succinct points #1 and #2 are such terrific follow-ups to Luke's post. I do hope everyone is taking this stuff seriously enough to apply the thinking (the questions) to all high-tech companies. are we comitting heresy by disagreeing with the author's gorilla proclimation of lu?? Did we commit heresy when we profoundly disagreed with Moore about Qualcomm? No, we didn't. Is Lindy commiting heresy when he calls Intel a King and gives the reasons to support his view? No, he isn't. Are the people who disagree with Moore & Gang about Lucent being a gorilla committing heresy? No, they aren't. Do you wanna know why? BECAUSE IT'S OUR MONEY, not the authors' money, that is on the line. We must always remain free thinkers, willing to be cautiously optimistic with a healthy sense of skepticism. Nothing is beyond reasoned question. Absolutely nothing. --Mike Buckley

To: 100cfm who wrote (12971)	12/19/1999 11:12:00 AM
From: mauser96	Read Replies (1) \| Respond to of 54805

Much as I value it, Gorilla Game is just a book, written by human beings that like the rest of us are not perfect. Certainly we should not be afraid to question some of the conclusions. Another reason to question LU gorilla status is it's very un-gorilla like difference between cost of capital and return on capital (Stern Stewart methodology) In the case of LU the spread is +5.9%. Similar figures for MSFT, INTC,and CSCO are +43.6%,+22.5%, +25.1%. What this means is that LU is finding trouble returning more on capital than companies like Allstate or Kimberly -Clark. This demonstrates their lack of true gorilla power. Source Fortune Magazine 11/22/99 issue. In many businesses customers both support and plot against suppliers, depending on the circumstances. This is not unlike other human behavior where a group will in-fight amongst themselves but unite against outsiders. Caveat- I own some NT, a competitor to LU, but I don't think it's a gorilla either. Both are crown princes probably, and while one may be ahead of the other in any particular field, they will share the telecom supplier market.