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

To: KY who wrote (17831)	2/13/2000 11:00:00 AM
From: William	Respond to of 54805

KY - I do hold some Cisco, exactly 1 year ago (2/12/99) my first (current) gorilla purchase. Up 162% in 52 weeks. A great steady climber. I say current gorilla for this reason. I have had various positions in IBM in the 60's, 70's, and 80's and believe it was probably the original gorilla. IBM would be a great case study for what can happen to giant highly successful high tech companies. I have not decided if I will lighten up at all on my Cisco position. I do not see a fat lady in their immediate future. Gilder seems to be saying there may be on in a year or two. Gilder is the futurist, not I.

To: KY who wrote (17831)	2/13/2000 11:59:00 AM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

>> Would be interested to hear what role CSCO plays in other GG portfolios. Decreasing in %? In your portfolio at all? From 4/5/99 to the middle part of 1999, I sold everything in my portfolio and put it into Q. As the year wound to a close, I developed a diversification plan that included Gorilla Cisco, which I characterized as a "sure thing". The only drawback I saw was a slower rate of growth for this behemoth than the other companies I was considering - ntap, gmst, and sebl. To compensate for this, I bought Cisco LEAPS instead of the common. My WIVARs (Jan 2002 90 strike price) have appreciated by 65% since 12/22/99 (as compared to 28% for the common), and Cisco is currently 10% of my portfolio. If you look at the November G&K Survey conducted by Sir Apollo, you see that 51% of the thread held Cisco in their portfolios and that it constituted 6.2% of the typical G&Kers portfolio. Message 12120512 In summary, I consider Cisco to be one of the finest companies in the world, and a quintessential Gorilla who is still squarely in the middle of the Mother of All Tornados - the Internet. uf

To: KY who wrote (17831)	2/13/2000 12:40:00 PM
From: shamsaee	Read Replies (1) \| Respond to of 54805

I read the same gilder report last year,where he basically says CSCO products are technologically inferior to LU,NT going forward and expects the effects to start showing in 2001.I only hold about 5% of my total portfolio in CSCO.I am not very tech orientated,However Gilders list of companies seems to be coming to the forefront as we go forward.people tend to forget,that he picked qualcom in 97 ,when most people had never heard of them including myself.

To: KY who wrote (17831)	2/13/2000 2:11:00 PM
From: JRH	Read Replies (1) \| Respond to of 54805

Re: CSCO's Position in my Portfolio Would be interested to hear what role CSCO plays in other GG portfolios. Decreasing in %? In your portfolio at all? CSCO was the very first stock that I bought, way back in the Fall of '96. I was a cheerleader of the company for a long time, and I followed them tirelessly through my first few years of school. A year ago (in January), I came to the conclusion that Cisco was way above its fair value and I sold about 1/3 of my position, essentially letting the profits, minus 20% (my expected rate of return when I first bought it) minus enough to pay capital gains on the sale, continue to ride. I learned something after seeing the price climb another 125% since that time. When you have good companies that are executing well, there's no reason to sell them (at least until fundamentals of the company change). [note: I did put some of that in the Q back in May, so I'm not complaining too much <gg>] After their latest quarter, I've never been more confident in their fundamentals. Their market share is growing in a marketplace that has huge potential. They are a bit behind some of their competitors in the optical marketplace. But, I've seen it before, and we'll see it again. The Cisco naysayers said that Layer 3 switching would kill their router business, and Cisco was late to the market. They were late with Gigabit Switching as well. But guess who controls about half of those markets now? My point is, Cisco will enter (and probably lead!) the optical foray by the time it really reaches critical mass. So with the fundamentals in place, I don't think that Cisco should be eliminated from anyone's portfolio. Buying at current levels is another story, and it is understandable to question the purchase. As far as the percentage of my portfolio goes, Cisco has decreased from 100% (in '96) to 45% currently. Not because I have sold some off a bit at a time, but because of additional funds that have been added to my brokerage account through summer jobs and such. JMO, Justin

To: KY who wrote (17831)	2/13/2000 11:57:00 PM
From: SL2	Read Replies (2) \| Respond to of 54805

KY, Since the beginning of this year I found myself asking essentially the same questions as you. FWIW: 1. First, CSCO has set a bench mark for my portfolio performance a "higher standard". CSCO has done this over a number of years not just a 12 month time frame, and that counts for a lot. CSCO is now "The Standard" by which I evaluate all other purchases. 2.Before buying shares in another enterprise, it sort of has to pass my "CSCO Test". If you think about it from a corporate perspective CSCO becomes my "internal rate of return" or Corporate "hurdle rate". I try to review this from both a quantitative perspective (e.g. growth rate, margins, net profit...) and Qualitative Perspective (Industry strength, management strength, ability to recruit and maintain employees etc.). If you haven't read "Common Stocks and Uncommon Profits" by Philip Fisher, I highly recommend it. If I'm not strongly convinced that the new enterprise has much greater risk/return characteristics than CSCO, I keep looking. 3. When I really like another great growth candidate (e.g. NTAP). I buy shares of that company using margin on dips. I then sell some CSCO to to eliminate or maintain my comfortable margin level. 4. As my CSCO position dwindles, it is being replaced by enterprises that I have a high degree of confidence in, because the company passed my sort of CSCO screening test. 5. One other thing I do, if there is a significant market correction and all technology stocks get pounded,I usually use margin and load up on good bit of CSCO. After it recovers, I sell it and put the short-term profit into another smaller great growth prospect. By using the margin to buy CSCO, I'm able to say to myself "if it doesn't bounce right back, don't worry I'm holding CSCO". But what I'm really thinking is how can safely raise cash to buy more shares of my best growth prospects. 6. I equate number of shares with reaching my "critical mass" goals. I'm constantly asking myself "how can I get more shares in my greatest prospects"? Hope this helps, SL2