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

To: Bruce Brown who wrote (34566)	11/11/2000 11:48:41 AM
From: Mike Buckley	Respond to of 54805

If there is just one person on this thread who is so daunted by the length and breadth of Bruce's posts that s/he might skip quickly through them (or worse, past them), I'd like to put one crucially important paragraph he wrote under the spotlight: "As many have hinted since last fall and much of this year, in terms of historic valuations even presented in the 'manual', gorillas/kings (and others) - along with most of the market - were at levels (and some still are) which have never been seen before for extended periods of time. Whether you call it CAP adjustment based on the interest rate/bond rate/business profits tax rate/growth rate environment or just plain valuation correction - it's real and has been on our doorstep ringing the bell and knocking loudly. Whether we label it a 'bear market' or a 'valuation correction' based on the underlying economic issues - we've been seeing it take place." Amen to that! --Mike Buckley

To: Bruce Brown who wrote (34566)	11/11/2000 12:02:18 PM
From: Jason W	Read Replies (1) \| Respond to of 54805

Bruce, Before I ask you a question or two, I'd like to thank you for being such a pleasure to read. I look forward to each and every one of your posts, and have learned more from you than perhaps anyone else in my brief Gorilla career. Now, if you would be so kind:-) What number or numbers do you look at when making a purchase decision? Is there any one valuation model that you consider most often? More precisely, how do YOU compare Gorillas, Kings, or W&W stocks when you have capital to invest? (A semi-simplistic answer is what I'm looking for. I am not a master of valuations) I have additional money to invest every few weeks and would like to have a MORE scientific approach to entry points. Right now I purchase using gut instinct and try and buy the best company among my list that is MOST attractively priced, at that time. Now I know that LTB&H will smooth out "good" and "bad" entry points, but improving my entry/selection process over the course of what will hopefully be a very long investment career could improve my portfolios value significantly over time. TIA, Jason W

To: Bruce Brown who wrote (34566)	11/11/2000 10:54:08 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 54805

The Cisco numbers The link notes the accelerating revenue growth trend. The issue of how long growth can accelerate aside, for clues as to CSCO the stock's weakness, you might also want to check out the trends in: * margins * share count * inventories * DSOs * other income (as a percent of pretax income) * composition of CSCO's investment portfolio (percentage of bonds therein) Amazingly, I have yet to see a Cisco bull discuss these numbers, much less explain how to derive a bullish case from them. or at least we should know include how much cash some of the companies we follow like Cisco, Intel, Microsoft, Siebel, Oracle, i2, Qualcomm, JDS Uniphase, Network Appliance, Sun Microsystems, etc... have on hand to weather the environment. Remember, it is not just how much cash these cos. have, but often, it is how much cash their customers have. A look at the spread between corporates and Treasurys indicates certain customers may have difficulties raising capital. This is what has killed the momentum in optical networking stocks, despite continued stellar numbers out of numerous companies. I don't think the cos. you mention have to worry yet about their own working capital and other capital needs, but if they ever do, God help this market. GLW just the other week raised like $1.75 billion, upped from $1.25 billion due to popular demand. Did we buy Qualcomm in 1999 as a one year play? Yes!