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

To: Sully- who wrote (38483)	1/26/2001 6:10:04 PM
From: EnricoPalazzo	Respond to of 54805

There's a difference between saying: a) making investments is a useful strategic tool (it certainly is for any current or aspiring enabling Gorilla trying to prime the pump--QCOM, MSFT, INTC, etc.) and b) the proceeds from the sale of such investments are a useful way to judge a company's short-term performance (IMO, they are not, due to their inherent volatility and dependence on the overall market). One should certainly try to figure out if a company's investing activities provide a good long-term cash flow. It's just so hard to do so. One might expect a good ROI from these investments, since these Gorillas have as good an understanding of their overall markets as anybody. If I recall, the sale of such investments started showing up big time in the pro formas of MSFT & INTC about a year or two ago. Again, if I recall, astute observers pointed out that it seemed like a transparent attempt to cover up poor operating results. Unfortunately, it's an addiction that's hard to break--now that the market isn't so frothy, it's hard to take these out of the pro formas, and ask people to judge YOY growth accordingly.