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

To: shamsaee who wrote (25805)	6/4/2000 5:49:00 AM
From: Seeker of Truth	Read Replies (1) \| Respond to of 54805

The truth is we are in the middle of a technological revolution. Computer use is still growing rapidly and on top of this we have the broad band/internet explosion. I can't think of any of our gorillas or kings that isn't involved in this. The growth rates are unprecedented. The P/E's are unprecedented. The volatility is therefore inevitable. There are examples all around of failed companies, crushed by one or more gorillas or by their own mismanagement. Also most people remember the low P/E's which even growth stocks had. People see that they can buy a conventional company for 20 times earnings and wonder how can a new company be worth 200 times earnings. Confusion reigns and the volatility continues. But I can't see a general and prolonged slump in the tech stocks, precisely because there are so many people developing yet newer technology and the progress gets faster and faster. For those companies smart enough and well enough capitalized to keep up with the trends, it's a marvelous time to be in business. I agree that it's best to keep cash for 5 years but I don't think it's necessary to hold cash reserves for 10 years. That's a matter of how nervous one is, of course. I personally simply don't fear the world of 2010. The general market probably will have indifferent performance in the next decade but IMHO that won't be true of the best tech stocks.

To: shamsaee who wrote (25805)	6/4/2000 10:46:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Shamsaee, He also pointed out that the true metal of long term investors is tested if you go into a bear market where you don't have huge drops but the index losses 20 to 30 points a week for a prolonged period of 2 to 3 years and most people can't take the slow bleeding and check out because job losses are frequent and people start liquidating stock positions to cover their expenses and at many instances sell at the lows. I agree entirely. Most of us (me included) have never been through that kind of market. However, it may be a very, very long time before we do. There will need to be some macro-economic conditions not currently on the horizon that will cause such a market. And given the nature of the volatility your friend spoke about, that volatility tends to make retrenchments deeper, sooner to happen and sooner to recover, making a long, protracted retrenchment less likely. Just an opinion. His last words were to diversify some of my investment in the form of Bonds and CD's from my profits on stocks.I know it sounds boring and old fashioned but It does make sense. Not to me. I think I've given the reasons here often enough that I won't bore anyone with them again. The lesson I took from our conversation was, before any one decides to be LTB&H investor(10 years minimum was his words),you should prepare for the worst and have adequate reserves set aside. And what would be different about that suggestion for a short-term speculator? --Mike Buckley