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

To: Thomas Mercer-Hursh who wrote (47878)	10/14/2001 6:32:39 PM
From: Jurgis Bekepuris	Read Replies (2) \| Respond to of 54805

Thomas, You offered a perfect explanation of your position. As a fellow scientist, I bow my head to it. However, being a "valuationist" investor I must admit that it is mostly art to me - and the one that I have not perfectly mastered (yet?). So even acknowledging the rationale of your stance, I doubt that you will get a positive result that does not involve a lot of intuition. And intuition makes back-testing impossible... For example, what would you use as MSFT's forward growth rate for 1980? 1985? 1990? If it is not based just on hard numbers, you can't test it, since you don't know or remember the "soft" situation in these years. I take the last 10 years of ROE as starting point, but I do intuitive adjustments from there, e.g., is ROE trending down? up? is the recent low ROE caused by a down cycle and expected to recover? or is it permanent change? All these can't be back-tested. Because of this and because of my own time limitations I personally won't pursue the direction you outlined. But best luck to you and others doing such study. I would be happy to hear the results Jurgis - now back to regularly scheduled programming...