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To: wildhart who wrote (1966)	2/10/2000 4:27:00 AM
From: LindyBill	Read Replies (1) \| Respond to of 10714

Wild, her is a copy of a post on the G&K thread tonite that covers your questions From: Mike Buckley ( Ignore ) Thursday, Feb 10 2000 3:45AM ET Reply # of 17628 CREE in the simplest of terms Fatboy, Hope that helps. Immensely. You have no idea how much! (Okay, having known a carpetologist, you probably do have a terrific idea of how much help I needed. :) To all, Seriously, folks. Think about what just happened in the big picture of using gorilla-game concepts to understand a company. In a total of four posts (two questioning posts of mine and two answering posts of Fatboy's), I came to understand the power of a company that I previously knew virtually nothing about. Moreover, the arena of the semiconductor industry is one I've always understood the least and consequently been burned the most in past investments, to the point that many times I swore I'd never again invest in it or any cyclical industry. (Yes, I still believe semis are cyclical but that's an entirely different subject.) For those who are having an understandably difficult time initially grasping the essence of what gorilla gaming is all about, focus on grasping the most fundamental issues in the simplest of terms. Using CREE as an example: Q: What does the technology (the product) do? A: One produces SiC. Another produces devices made from SiC. (Remember: break it down to those simplest of terms! Try to keep all answers to three- or four-word sentences!) Q: Is the technology proprietary? A: Yes. Q: Is the technology open? A: Yes. Q: Are there high switching costs? A: I haven't gotten that far. I'm only a freakin' carpetologist! But I suspect so. Q: Has the value chain formed? A: Probably not. It appears to be coming together in the product of blue LEDs more than other products. Q: When looking for a tornado, what is the constraint that has kept it from forming? A: Capacity. Q: What's going to eliminate that constraint? A: Increased manufacturing capability. Q: Why will manufacturing capability increase? A: Factories are being built. Licensing the manufacturing technology may add more capacity. Q: When is that likely to happen? A: Probably late this year or sometime next year. In summary, I've joked about the fact that I'm interested in any company that might some day replace the light bulb. But the fact is that at this ungodly hour of the morning, I am now seriously interested because for the very first time I now have an incling about the company IN GORILLA-GAMING TERMS, thanks to Fatboy's answers to a half-dozen of my questions. That's ALL it took. If I've read a sum total of ten posts about CREE in full, I'd be surprised. I simply haven't taken the time and only did so recently because Frank hinted that he'd like me to get involved in the discussion from a gaming point of view. My very long-winded point is that this gaming stuff really does work when it comes to understanding the power or weakness of a product. If you don't get it yet, persevere. It will be well worth it to you! In my mind, there is no set of investment skills that is more easily transferred from product category to product category, from industry to industry, or from company to company than gorilla-gaming skills. And there is certainly no set of skills more vital to our long-term success. Damn, this is exciting! :) --Mike Buckley

To: wildhart who wrote (1966)	2/10/2000 4:38:00 AM
From: unclewest	Read Replies (4) \| Respond to of 10714

At this point I do not see Cree as a Gorilla. It seems to lack the proprietary technology with high switching costs. i have a different view.... i believe if you add up all of the $$$ spent by GE, westinghouse, nichia, siemens and everyone else who have "failed" to develop/produce a high quality SiC crystal, you will find that so far the switching costs for them have been impossibly high. i realize that should someone develop a better and cheaper tech cree's customer switching costs may be low. here one must take a leap of faith. it requires a belief that due to the above (first paragraph) the proprietary technology is secure and superior. you can make LEDs from material other than SiC, but only at much higher cost. as long as this pricing disparity exists and the LED market grows, cree's screaming success is assured imo.