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

To: Mike Buckley who wrote (35873)	12/2/2000 11:18:30 AM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

One of the theories that we've held dearly is that due to their inherent strengths, Gorilla and King stocks will be among the last to be affected by a general downturn, and among the first to recover. Yesterday's market action offers a data point in support of the second half of the theory, which we have precious few opportunities to test in recent weeks. Nasdaq composite (compx) increased 1.8%. Nasdaq 100 (ndx) increased 1.6%. Gorilla & King Index increased 3.8%. UF's portfolio, a subset of the GKI, increased 6.2%. I hope we'll have 4 or 5 up days next week to provide additional confirmation <gg>. uf

To: Mike Buckley who wrote (35873)	12/2/2000 12:03:46 PM
From: johndelvecchio	Read Replies (1) \| Respond to of 54805

Geez Mike, I guess you do like to put pressure on me! : ) Yeah, I will come up with a three stage model. This is kind of like a baseline valuation, it should not be a hard-and-fast number that you live or die by. That's because with the types of stocks we are talking about here, we are talking about a lot of intangible factors. One thing I have been working very hard on and getting nowhere is in trying to find a framework that tells you more about what is implied by the current price rather than the exact value of the firm. So, for example, how various key value drivers like revenue, operating margins, and working capital investment are expected to perform in order justify today's valuation. I want something that is kind of plug-and-play. Basically, you could fool around with some assumptions and see what you get. So, for instance, you could look at Siebel and figure out if they increased revenue by 2% more than what's expected, how would that increase value. So on and so forth. Consultants do this a lot when they talk with companies, I just haven't found anyone who will share anything with me. But, a three stage model is a good start. Best, John