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

To: Mike Buckley who wrote (39286)	2/15/2001 4:16:36 AM
From: Bruce Brown	Read Replies (1) \| Respond to of 54805

When Bruce returns to our stage, he doesn't simply walk on and say, "Hi! I'm back." Nope. Making a grand entrance in full stage make-up and tights, he immediately gets to the heart of the matter and seriously seriously questions Moore's theory that Gorilla Gaming stocks aren't yet selling at multiples "parallel" (whatever that means) with non-tech multiples. Not to worry, as soon as the post arrives in my inbox in today's listserv, I'm going to question Geoff about his comments for more explanation. We know his history of comments and he is simply trying to contribute and offer opinions on that thread as are all posters. He is a participant just as everyone else is. Had his comments been posted back in November when Microsoft was at $70 on the way down to the $40 or Intel at $48 on the way down to the $29 I might have put more credence into them as having been prudent and timely. Yet, both companies 'seem' to have visited the point where the market says "in relation to other dominant franchise names in the S&P 500 that are non technology stocks, it appears that a P/E multiple of below 20 seems like an undervalued situation that warrants accumulation of these two dominant technology gorillas at these levels". I can say that now in retrospect because both shares of Microsoft and Intel were purchased in those ranges by somebody. We don't know yet if that was the actual 'bottom' or point for accumulation in those two or the others to be justified, but it wouldn't surprise me if Geoff's comments were a few months late in regards to those equities. If not, I'll certainly eat my words. If he was addressing other equities that are not as mature in terms of the TALC, perhaps we have yet to see. I will report back here what my question and his response is to those issues. I would be curious to hear his market commentary on the S&P 500 in terms of valuations and how a strategist would apply that to what he said about technology. Obviously, in a economic cycle shift, the market goes through various industry segments which come in and out of favor based on the location in the cycle. Depending on if it turns out to be a recession in retrospect, the industry segments that have been showing strength of late don't yet point to the point in the cycle that technology begins to come into favor. Although I would hasten to say that it is not far off and the markets - as smart as they have become - tend to anticipate things earlier and earlier. That's not any sort of investment advice, but simply the reality of how the market reacts during a slow down, during the pick up and during the neutral between points. Rotation in and out of the various segments that are the traditional 'map' of the cycle are pretty much nice commission generators for the brokerage houses and they make plenty of money going long as well as short each sector as they encourage the rotation in and out of each sector. Wash, rinse, repeat and cash in for the investment houses. If we fail to see layoffs in that industry, then we'll know that the teams failed to manage their shampoo dispensors well enough to keep the 'game' running. I can't wait to see Bruce's comments in response to Paul Johnson's thinking that we can't be Gorilla Gamers because everyone in today's market is a trader who can't hold a stock more than a year or two. That should make Bruce's tights get even tighter! I imagine we could approach his brief comments from two angles. The more appropriate would be that few investors have the patience and are willing to apply the strategy of early investment in a basket using the consolidation strategy to the eventual emerging leader to hold for the TALC. It was discussed on the Fool board that this is the angle he was suggesting rather than encouraging a trading mentality which would be the other angle. Either way, the reality is that the market has used both strategies in the past two years. I don't know the intent behind his trading comments, but I'm too aware of the benefits of longer term compounding provided one has the patience to practice it with at least a portion of their portfolio. Glad to have you back, Bruce! Hope the folks in Tennessee liked your French accent. :) Thanks. I didn't get the pleasure of utilizing any French in Tennessee outside of a few choice words I used by not being able to find any decent vegetables. Why? "L'Elisir D'Amore" is an Italian opera. ;-) Of course, DownSouth pointed out to me that okra was a fruit. Regardless, I didn't have any long green pods used for stews and soups from said shrub. BB