Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Eric L who wrote (23622)	4/26/2000 3:39:00 PM
From: Pirah Naman	Read Replies (1) \| Respond to of 54805

Re: The Dismal Scientist on Qualcomm, Cisco, et al He is right in his approach, and it does not contradict the Gorilla Game at all. The FM provides graphs instead of formulas, but it is explicitly stated in the book that a company, including a Gorilla, is worth the current value of all future free cash flows. It is appropriate to question his use of earnings as a proxy for free cash flow, and you might wish to use a different set of assumptions, but the basic approach is sound. And IMO should be followed. Speaking of using earnings as a proxy for free cash flow, I hope this will be taken as a contribution and not as a criticism. Unlike JDSU, which reports negative earnings but has positive free cash flow, CREE has had negative free cash flow every year that they've been public, despite showing positive earnings. Semiconductor companies as a group do not have great free cash flow, and I know that CREE is expanding, but I would suggest that those interested in CREE watch this. - Pirah (who really is a valuation nut)

To: Eric L who wrote (23622)	4/27/2000 1:00:00 AM
From: tekboy	Read Replies (2) \| Respond to of 54805

Eric-- I draw a different conclusion--buy the Q rather than all those other even more overvalued dogs! tekboy/Ares@dismalisright.com New Economy Valuations Stock 2000 5-yr 4/20/00 True Over- yrs. of EPS growth price Value valuation 50% growth (est) (est) needed AOL 0.36 50% 60 13.59 341% 10.6 Cisco 0.52 30% 68 9.60 608% 9.7 eBay 0.35 50% 148 13.21 1020% 14.1 Jupiter 0.25 50% 23 9.44 144% 8.3 Lucent 1.40 25% 63 21.24 197% 5.6 Microsoft 1.67 25% 78 25.34 208% 5.8 Qualcomm 1.71 50% 114 64.56 77% 7.1 Yahoo! 0.44 75% 126 35.90 251% 12.6