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

To: tekboy who wrote (23418)	4/24/2000 10:04:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

I ran some quick valuations of all the stocks I own. In very rough order, I'm placing them in order of how I percieve their valuations from lowest to highest: PEG PSR Qualcomm 3.4 19 Siebel 5.1 23 Citrix 2.3 21 EMC 3.5 22 Gemstar 4.5 41 Cisco 6.5 30 As a general comment, I'm a little relieved to see that two-thirds of my stocks are priced at a PSR of around 20. That's a little more realistic than the previous valuations. I think Qualcomm is the best long-term value in the group because of the potential of its market combined with its decent (though not low) valuation metrics. Siebel is next on the hit parade because of a special situation -- analysts have already raised FY01 estimates 6% since the most recent earnings report. I expect that to be the trend over the coming two years, making the current ratios a better value than they otherwise appear at a glance, especially the high PEG. Looking just at the numbers, Citrix appears to have the best valuation. But I don't think it really is the best value because there is a good degree of uncertainty about the stuff that is important to me. When will the tornado begin? Heck if I know. Will the tornado ever take place? Heck if I know. EMC is kind of like a Timex watch in that it just keeps on ticking. I don't see anything particularly overvalued or undervalued about the stock and am happy to let the company continue to be the beneficiary of the long-term need for storage. A lot of people might be shocked to see that I think Gemstar has dropped 60% yet remains on the high side of the valuations relative to my perception of the other stocks in my portfolio. I've said many times that I have no idea what the fair value of the stock is, especially since I haven't factored in anything about a combined Gemstar/TV Guide entity. All in all, seeing a stock hovering at a $10 billion market cap with a PEG of 4.5 and a PSR of 40 does seem overvalued when looking at the next couple of years. Of course, I don't own the stock because I'm only thinking about the next couple of years. Out of context, Cisco appears to be clearly overvalued. However, as long as the market is willing to continue paying a huge premium because of the long-term predictability of the company's performance, the stock isn't nearly as overvalued as it might otherwise appear. If the market has any reason to question that predictability, I expect the stock will tank big-time as it used to do several years ago. When I submitted my portfolio standings to Stan, I intentionally didn't make a sure-fire 12-month prediction. I would be better at predicting the winner of the World Series and I know practically nothing about the strength of baseball teams. However, I do believe Gemstar is the stock that has the greatest potential, the greatest possibility for surprise that might eventually enamor the investing community in the coming decade. That's the only call of that sort that I'll make about the stocks in my portfolio, the one that we'll see about on 12/31/2009. --Mike Buckley

To: tekboy who wrote (23418)	4/25/2000 8:58:00 AM
From: Apollo	Read Replies (2) \| Respond to of 54805

Tekboy.........I love you, but what a pain in the arse you must be. It's a survey for fun, not the Middle East Peace process!!!!! Setting aside unimportant things like patient care, let's turn to your questions. Mutual funds will be treated in the Survey as cash; why in the world would you do this? For simplicity, and because many draw from the mutual funds to invest in individual equities, just like cash. No, MF's are not identical to cash. But when you do the next survey, I know you'll handle this one better. what is the single best stock pick; I would have thought this meant from among one's own holdings, no? Otherwise why isn't in one's holdings? But you put down SNDK, which you don't seem to hold... Never, never assume. That's the first principle to good patient care that we teach our young docs in the intensive care unit. The intent of the 2nd question in the Survey is to get the survey participant's best guess of what company they think is in or will soon be in the tornado. Whether one is smart enough to be invested in it is irrelevant. In my case, I think SanDisk is in a big tornado, and that this is recognized by Mr. Market. I think it's a double. But I like my other investments too much to sell, and I would have unjustifiable tax consequences. My personal style has been to be "always invested", hence no cash to invest. I liquidated all my mutual funds (cash reserve) last year to load up on Qcom......which paid off very well last year. So I don't own SanDisk, but wish I did. how should one treat margin? Let's say that one held 100% of your account in QCOM, and then bought half again as much GMST using margin. Would one list the account as 100% QCOM and 50% GMST, or 67% QCOM and 33% GMST? the latter. your investment and portfolio value here include all for which the investor is responsible, both the initial cash and the loan. Apollo