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

To: Seeker of Truth who wrote (43748)	6/21/2001 2:12:49 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

Frankly I am sour about stocks that are not resistant to recessions. Unfortunately, as we have just seen, a Gorilla which is recognized by the market is likely to have higher valuation than the norm and thus particularly prone to rebound when things turn sour. Or, were you referring to the company's earnings and not the stock price?

To: Seeker of Truth who wrote (43748)	6/21/2001 7:14:42 PM
From: Stock Farmer	Respond to of 54805

Yes Malcolm, this works. If you extrapolate this logic now you can draw many of the other conclusions I was alluding to as well. Let us assume for a moment that you think the assets that you hold will store their value and be essentially flat. Let's assume for the time being that you are aware of other assets not-so-flat. You have a dollar in your pocket. If you stand by your thinking you can see that it may be much much better to put that dollar elsewhere than it is to purchase more of these "underperforming" assets. Now, what happens when you have no dollars in your pocket. You hold an asset that you believe will under perform an alternative. Feel free to leave it there underperforming away. Or maybe write covered calls against it (independent of its projected lifecycle return <wink> ). Some people appear to be adamant that's the right thing to do. John.