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

To: StockHawk who wrote (37973)	1/15/2001 3:59:15 PM
From: tekboy	Respond to of 54805

gee, that tekboy guy made a good case for Gemstar, didn't he? amazing how his premature and reckless investing style, combined with a world-historical Naz tumble, turned all that into so many ashes... ctb/A@&#*$@(!!@.!!!

To: StockHawk who wrote (37973)	1/15/2001 5:37:37 PM
From: gingersreisse	Read Replies (1) \| Respond to of 54805

GMST was perceived as a pure play EPG by me, and TVGuide was seen as a welcome line extension with high name recognition. However, the combination of a poorly executed e-book initiative and a disastrous conference call asks if there is a game plan. I thought we had a proprietary standard, open to all licensed users. Clearly we don't have that in e-books. Perhaps Henry has a plan, perhaps John Malone and Rupert Murdoch have a plan for GMST (they own 46%), and perhaps the eyeballs will be converted to significant value. For this 2 year plus GMST investor, Henry has to prove he can deliver the goods and convert a very exciting business model into profits to justify the price, whether $30 or $100. I don't think he has, and the market has exacted a pound of flesh for that infraction. (End of rant!) GSR

To: StockHawk who wrote (37973)	1/15/2001 8:45:42 PM
From: BirdDog	Read Replies (2) \| Respond to of 54805

I very much agree with your points. I would like to ask the group to consider a couple of things. One) In 99, gmst's stock went from below $20 a share, to over $100 and split twice. I would have to state that gmst actually has gone through a tornado. And as dictated on pg 150 of TRFM: The first stock price increase has already passed us by. We are no longer in the tornado watch phase... we are in the "tornado warning" phase. And we are waiting on the next tornado. I'd also like to add that I am the one who switched from undecided to definite Gorilla. I've seen enough to show me that GMST has the Gorilla power, in and out of court. Also I might add that at this point; Bullishness is most of what I have. BirdDog

To: StockHawk who wrote (37973)	1/15/2001 10:12:23 PM
From: EnricoPalazzo	Read Replies (5) \| Respond to of 54805

Hmm... You suggest that sentiment about GMST has changed because its stock price has fared poorly. And yet, QCOM hasn't done so hot either. INTC and MSFT have tanked. But I don't see people questioning their Gorilla status (OK, except me on Q, but I won't "open my mouth and remove all doubt"). Maybe the real psychological problem here is that people have trouble thinking a) GMST is a Gorilla, and b) GMST may not be such a safe investment, both of which statements have become clear this past year. FYI, I voted that GMST is a Gorilla. And yet, I recently sold my investment in them. I like to think that I'm a moderately disciplined investor, so how to reconcile these actions? First of all, I like to think of Gorillahood as a question of degree. It's not just "is X a Gorilla, yes or no?", it's "to what extent does X have the attributes that we recognize and value in a Gorilla?" <bias>MSFT has them all.</bias> INTC has many of the really valuable ones, as does CSCO. QCOM has (IMO) the ones that lead to tremendous success in the medium term (say, 5-10 years), but not necessarily in the long term. Same with RMBS. And so on. So I have some trouble saying that a company is or is not a Gorilla without qualification. But I'm of course grateful to all of you for letting me participate in this thread, and swallowing my qualms about your language is a small price to pay. With that said, I'd say that GMST has obviously got a lock on the IPG/EPG market (I say that not knowing what IPG/EPG stands for... I said I was *moderately* disciplined...) due to their patent porfolio/licencing agreements. Here's where I think they fall short as a compelling investment, though: a) Weak "control" of open architecture This is the last one I wrote, but I bumped it up because it's important. As with any other "Gorilla" that makes its money from licencing broad patents to others, it doesn't have as much control as we'd like to shift the architecture in its favor. Intel can add a new functionality to its chip, thereby gaining a big market, and totally changing the PC architecture. Microsoft can do likewise from the OS perspective. Cisco can do likewise (as long as customers value an integrated system more than best-of-breed functionality, which may not be the case for the non-enterprise market). I don't think that GMST can, though, because they don't actually create a product. If, say, another technology involving T-Commerce comes up, GMST can't force their licencees to incorporate it into their onscreen guides, unless GMST happens to be the first one to patent it. The upside of a patent-based model is that you get money from some one else doing the work. The downside is, since you don't do the work, you have much less control over what the final product looks like. b) No tornado. Unlike MB (and apparently GM), I think that a company can be a Gorilla without a Tornado. The essence of Gorillahood is in the proprietary control of an open architecture, not in the circumstances surrounding one's birth. However, Gorillas born in the Tornado tend to solve a compelling need (hence the rapid adoption). Also, the Tornado tends to be evidence of a disruptive technology, since Tornados happen when the whole market migrates en masse to the new architecture. Both "compelling need" and "disruptive technology" are very nice, in that they imply tremendous value and tremendous switching costs, respectively. c) Sketchy leader. There's no question that Henry is god-awful at communicating with GMST's investors. I don't think he's dishonest, but this whole "mad genius at the helm" thing is worrisome. I have very little faith in visionaries who lock themselves in a room until they've solved the world's problems. I'm much more interested in a person who can create a corporate culture that can effectively solve these tough business problems than one who insists on running things him- or herself. This doesn't bode well for the longevity of the enterprise post-Henry, nor does it imply an ability to scale (corporate culture scales, one guy doesn't). d) Rupert Murdoch. I have nothing against Murdoch as a person. OK, seriously though, Murdoch's huge stake in the company is troublesome. Will he force it to do things that are against the interest of other shareholders, but in the interest of Sky Media, or SPECTRE, or whatever his group is called? Or will he just buy it out when things go well, robbing the rest of us of tremendous returns? Yeeech. e) EBooks Agreed, EBooks doesn't speak to the question of GMST's Gorillahood in IPG/EPG, but they do tell us something about Henry's priorities. I think a CEO with a greater sense of the importance of critical mass in such a device would have tried to push them out at a much lower price than they appear to have done. GMST is a Gorilla that I wouldn't touch until these issues are cleared up to my satisfaction.