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

To: Bruce Brown who wrote (29439)	8/5/2000 1:30:36 AM
From: kumar	Respond to of 54805

Bruce Thanks! the "ageing" part is worth a think (follows from your TALC views, doesn't it ?) cheers, kumar Rather than spend the time debating what they are or are not - as long as the metrics remain as healthy as they are - I see more value in uncovering more youthful companies that are emerging in a gorilla or royalty game. That way, money is diversified within various 'age' groups of the most dominant technology companies in the various segments.

To: Bruce Brown who wrote (29439)	8/5/2000 2:24:40 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

>> I see more value in uncovering more youthful companies that are emerging in a gorilla or royalty game. That way, money is diversified within various 'age' groups of the most dominant technology companies in the various segments. Since I know you put capital preservation high on your list of priorities, it would be interesting to know how much of your portfolio you devote to prospecting endeavors versus lower risk investments. Speaking for myself, my portfolio has grown increasingly conservative as this most difficult year has progressed. Wasn't Y2K supposed to be the year that the market would enthusiastically embrace high tech? uf

To: Bruce Brown who wrote (29439)	8/5/2000 2:45:30 AM
From: Mike Buckley	Respond to of 54805

Bruce, That way, money is diversified within various 'age' groups of the most dominant technology companies in the various segments. An interesting way to look at diversification that I don't remember contemplating. It makes a lot of sense. --Mike Buckley

To: Bruce Brown who wrote (29439)	8/5/2000 5:21:15 AM
From: Seeker of Truth	Respond to of 54805

Bruce, diversification by age is your brand new invention, and a fine one it looks to be. I'll bet that any future edition of the manual will incorporate it. It implies, I suppose, diversification by size. Somehow life in a little company is exciting but dangerous. And a big company can ossify when the top boss(es) are too far away from the real picture many layers below them to make sensible decisions. So maybe we should hold both the fledglings and the oldies lightly?

To: Bruce Brown who wrote (29439)	8/5/2000 7:29:31 AM
From: Don Mosher	Read Replies (3) \| Respond to of 54805

Bruce, My argument is that JDSU has innovative power that can say, stir, rather than, say, shake its value chain. There are degrees of control that we, as investors, might come to understand, rather than settling for categorizing a company as either a gorilla or a king. JDSU's control is expressed through many competitive advantages that follow from its business strategy as it achieves critical mass in scientists/engineers and in manufacturing generally, and as it specifically integrates its broad product line into modules of increasing complexity. The power-increasing movement is from components toward systems on a chip, systems that are migrating toward embodiement in silica, systems at the beginning of a massive learning curve similar to that underlying Moore's law. This movement is toward offering a total solution, with all the competitive advantage that end-to-end solutions bring. Moreover, at some point, these modules become complex enough to have an architecture that could become proprietary by patent; some may be already proprietary as process know-how now. Knowledge, itself, creates power that varies in degree. A lock-in can be achieved by one giant step or through a set of baby-steps. Either in-house research or acquisition of new technology can further their lock-in from various forms of proprietary knowledge. Now, JDSU is the principal player, larger than all of its competitors combined, and growing at least twice as fast . If we understood the technology better, were able to listen to it, we might hear it whisper JDSU's increasing degrees of control that guarantee its increasing returns as lawlike. Because the switching costs scale up with the complexity of the modules and no competitors can match their growing level of modularity, JDSU is already a stock to hold more tightly than lightly. In addition, it is catching the technology wave of DWDM that enables the infrastructure of the Internet. A wave that is created by Metcalf's law, a law that is arguably both faster in its effects and has further to go down its learning curve. The Internet is the mother of hypergrowth, what Moore calls the 100X change. This change of change is vastly revolutionary, a technology wave of tsunami height and breadth. Picture this wave as an area graph of GAP and CAP. When you have a new, larger, King, a company that developed from combining the manufacturing capacity and know-how, the scientists and engineers of four or five (OCLI) component manufacturers--all within a year and a half--and that in doing so integrates the very same four companies that Weingarten and Johnson sited as the four compelling plays last year, you have new synergies that can only increase the power of JDSU within its value chain. Perhaps, worthy of being called a Kingilla. The growing, unmet demand forming the Tornado of DWDM hypergrowth has already ensured a standardization on this modular process at least; it may also insure an increasing degree of standardization on JDSU's specific modules. I hope this helps clarify my argument. Don

To: Bruce Brown who wrote (29439)	8/5/2000 9:24:04 AM
From: gdichaz	Respond to of 54805

Bruce: Thank you. You have just put into words a far superior way to look at investment "balance" than the old worn large stock (or large cap) mixed with medium stock (or medium cap)and/or small stock (or small cap). Very perceptive IMO. I realize now this was a "balance" that I learned from the Motley Fool without fully appreciating what it was. Since you are heavily involved with the Fool seminars right now, strongly suggest you put this new valuable concept out for discussion in your seminar and elsewhere in Motley Fool. Best. Chaz PS Would much appreciate your view as to why "broadband" is limited to wire only. Seems myopic to me. Sure if IP/Broadband is an "area" - if just a convenience used for detailed analysis, fine - but then suggest that a similar "area" might be wireless - and then a helpful discussion of the potential links between the two and possible substitutions of parts of one for parts of the other. There is not only a coming link between the internet (or so called "IP/Broadband") and wireless which seems likely to far exceed wire for the "last mile" but the use of wireless using CDMA/HDR(1xEV) as a connector seems likely to be out in the market strongly in the second half of next year and gather strength and clout thereafter. DSL should then become a "legacy" system - a fading memory. (And of course there are major "wireless broadband pipes" possible - and satellites too). Is the limitation of the term "broadband" to wire a convenience or a mistake? Seems like it limits thinking. The "area" of discussion and analysis can lead to too narrow a focus sometimes. Isn't the exculusion of wireless and the very real competition from wireless to wire, an example?