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

To: Grantcw who wrote (14571)	1/8/2000 10:35:00 AM
From: sand wedge	Read Replies (1) \| Respond to of 54805

Willy, I have been asking myself the same questions since becoming aware of this thread. MSFT, from my perspective, is dominate in several areas. It is without a doubt a silver backed gorilla. But as I consider the future, I wonder about their competitive advantage going forward, especially in their ability to create and dominate new tornados. This is not to say that MSFT will not continue to be wildly profitable or an excellent investment, quite the contrary in fact. But when considering GG rules and theories, the following may explain why other companies dominate our discussion. My thought is based on MSFT's dominance which is all leveraged from the operating system. This was a position of strength as long as the "thick client" paradigm continues. Since the future appears to dominated by mobile, thin browser, easy access and wireless based, you have to wonder about MSFT's competitive advantage in that form factor. Before anyone gets their flame thrower fired up, understand I am not saying that Windows and it's dominance on the desktop is losing ground. I am simply stating that in the future, people will be accessing data in far more practical ways then through a screen, keyboard and mouse. MSFT's problems in the CE world are well documented. From my perspective, the paradigm is shifting. I consider the box makers scramble to more of an "appliance" approach as signal on this direction along with the obvious growth and awareness in wireless, handhelds and other many other new products being introduced everyday. On the database front, while SQL is experiencing a decent level of acceptance, there continues to be a reluctance in the IS world to move away from Oracle in mission critical applications. IBM seems to be the only real threat to Oracle's domincance in this area. Cisco, on the other hand, has an uncanny knack to produce tornados and dominate them at will. Intel, while having produced an excellent value chain, is dependent on several factors and has competition at every corner. Gateways' announcements this week seem to prove this out. Ok, this is my second lengthy post in one day. Can you tell it's raining here??

To: Grantcw who wrote (14571)	1/8/2000 11:39:00 AM
From: gdichaz	Respond to of 54805

Chilly Willy: You ask a tough one - at what point does the Q deserve to be treated as a mature gorilla? Since I have followed the Q for years, let me give it a try. The key is that "The next Qualcomm is Qualcomm" is not an empty slogan but a perceptive summary of the Q's past and potential. The next Qualcomm is data - or more broadly - the wireless / internet (intranet) nexus. As Dr J has said, he sees the future as exciting. One of the fascinating aspects of the Q is that the deeper you dig into its opportunities and how the Q's management is approaching them, the more "exciting" in Dr J's phrase the future seems to be. Is this a slam dunk, of course not. Are the odds good, seems so. So in my case the only question I have today is whether having only about half my portfolio in the Q is enough. Admire those who are more heavily in the Q because I expect they will therefore do better relatively, but I hedge by a very strong position in JDSU which I consider second only to the Q in potential. And since I think wireless and fiberoptics are where to be, I like being strongly in the best company I have been able to find in both. Hope this helps. Best. Cha2

To: Grantcw who wrote (14571)	1/8/2000 11:41:00 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

>> These three companies are definitely still considered Gorillas, but I don't think the thread agrees with its mantra that it is never too late to buy INTC, MSFT, & CSCO. JMHO about the Silverbacks: Intel is a cyclical and there are some timing issues related to holding it. Up until recently they have been focused largely on PC's, which has been a sector in disfavor. Now that they are using their Gorilla Power to gain entry into server farms, networking ICs, and wireless products, they are back on my radar screen. Microsoft has been in the midst of legal problems for almost 2 years, and it has placed a damper on their growth potential, despite posting incredible earnings reports during that period. I am waiting for them to settle with the doj before considering re-entering. Steve Ballmer's comment about Mr. Softee being overpriced hasn't exactly encouraged me, though. Despite their >350B market cap and Silverback status, Cisco is still amazingly vital and imo a sure thing, though their growth rate will probably not approach that of Qcom. In order to take advantage of their solid prospects, I have put them back in a prominent position in my portfolio in the last two weeks, but through the vehicle of LEAPS to enhance their returns. For ltb&h low risk/reward investing, the Silverbacks are always a great choice. uf

To: Grantcw who wrote (14571)	1/8/2000 2:41:00 PM
From: LindyBill	Respond to of 54805

Chilly, Our optimum position in a company is try to ride the left side of the bell curve as it goes vertical, stay on it until it flattens out, and then move on to the next Gorilla or King and do the same. If you had split your portfolio between "the three Gorillas", MSFT, CSCO, and INTC, last year, you would have made better than 70%, so buying them is certainly not a bad way to go. We are greedy here, and want a double every year. Last year, most of us did much better than that. That colors our thinking right now, and makes us more confident, and willing to take a little more risk. I personally see QCOM as worth 400 to 500 Billion in the next two to three years. That is very bullish, to say the least! My attitude is not fixed, if I see growth slow and I think it will flatten out, I will move on.

To: Grantcw who wrote (14571)	1/8/2000 7:00:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

cw, Good point. At what point does QCOM lose its risk/reward valuation in the thread's eyes a la CSCO, INTC, and MSFT? Is it not a valuation issue at all? Valuation is immensely important. The issue is that the market has an historical tendency to undervalue Gorillas, especially young Gorillas which is what Qualcomm is. For me, the biggest issue about comparing Qualcomm to the other three is understanding the size of their respective markets. I have no idea how large Qualcomm's market might be ten years from now, though I suspect it has the reasonable possibility of dwarfing the markets of the other three. Until I have a better handle on that, I'm not planning on changing my fundamental thinking about the stock's price. And don't forget the possibility of tornados forming in new markets for Qualcomm, such as HDR and digital cinema. It's my belief that the potential of those markets is not included in the current price of the stock. --Mike Buckley