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

To: Bretsky who wrote (34431)	11/7/2000 6:40:46 PM
From: StockHawk	Read Replies (1) \| Respond to of 54805

Hi Bretsky, thanks for taking one for the team. You also raised a question: I'm just trying to figure out if the concerns with PMCS/BRCM are real or bunk. Am considering adding to both. It struck me that PMCS and BRCM were mentioned together in a post here not too long ago, and with mischief in mind, I dug it up. Take a look at this: QCOM is dead money for as far as the eye can see. The above statement is from a post on July 21 made by a fine gentleman with the handle of DlphcOracl. Bruce Brown asked which stocks Dlphc thought would perform better: "Could you pick one or two stocks for all of us that are 'live' money for as far as the eye can see?" and on July 22 Dlphc bravely offered this response: Bruce B.: You already own two of them -- SEBL and NTAP. BRCM and PMCS also come to mind. As probably no one will recall, in the spirit of a little fun I set up a portfolio to track this "challenge" with a July 22 starting date. The objective was to see what would perform better, the beaten-down QCOM or a four stock combination that included two "regulars" around here, SEBL and NTAP, plus the brave new warriors BRCM and PMCS. The portfolio assumed a net investment of zero. It accomplished this by going long $100,000 in QCOM and going short $100,000 equally among the other four ($25,000 each). Therefore the portfolio is positive (and profitable) if QCOM outperforms the others and the portfolio goes negative if QCOM underperforms. It has been a little over 3 months since, so this is not a conclusive result, and of course things change quickly in this market, but as it stands today three of the investments would have made money: the QCOM long, the PMCS short and the BRCM short. The shorts on SEBL and NTAP are losers right now. In total the QCOM long has outperformed the collective shorts, giving our hypothetical portfolio a value of about $17,000 which is nicely above the starting value of 0. I don't look at this port too often, but a few weeks ago it had a value in excess of $30,000. siliconinvestor.com I realize this response does not answer your question as to whether today's price drop on shares of PMCS and BRCM was too much or not, so here is MHO on that issue: Both fell on huge volume and both closed near their lows of the day. In most cases, stocks that do that take at least several days to settle, and they generally drop more during that time. (That was the pattern with INTC recently, or take a look at NT more recently or Compaq back in April 99). Remember, the news that hurt these two today was revealed the night before, so while it might be spurious, the market had an entire day to think it over, and it showed no sign that it regarded the news as false. That's different from what happened with RMBS last week. There was a spike down on news, but as the Market digested it the stock reversed. It still closed down on the day, but well off its lows. So, if you wish to buy, waiting a few days might be prudent. On the other hand if post- election euphoria hits, everything might jump up. StockHawk