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

To: hueyone who wrote (48801)	11/12/2001 10:08:32 AM
From: JHP	Respond to of 54805

There are two issues here. One, is that JHP is a _________( fill in your favorite derogatory word). The other, as that article pointed out (as has many other articles pointed out), the tech sector, including Gorillas, has been particularly egregious in its use of engineered pro forma accounting. Cisco was terrible in this regard and I suspect continues to be so. Favorite derogatory word? GORILLA i bet you guys wished you never heard the term. LOL john

To: hueyone who wrote (48801)	11/12/2001 3:12:21 PM
From: Eric L	Respond to of 54805

re: The "Value" of "Brand" << I am willing to bet a little money on the theory that people will continue to pay some premium to economic value for leading tech companies, but deciding what is a reasonable premium (as well as figuring out what premium one is paying) is tricky indeed. >> One asset that we often discuss here as it relates to technology companies, is the "value" attached to an Intellectual Property platform. Occasionally we also discus the value of "Brand", but without attempting to quantify that value. I missed this August 6, 2001 Business Week article titled "The Best Global Brands" when it was published: businessweek.com [Note also several "related items" linked in the right hand sidebar] A few excerpts from the article: >> Business Week has teamed up with Interbrand Corp., a pioneering brand consultancy in New York, to offer a ranking of 100 global brands by dollar value. The ranking by Interbrand, a unit of Omnicom Group Inc. (OMC ), is based on a rigorous analysis of brand strength. The basic theory is that strong brands have the power to increase sales and earnings. Interbrand tries to figure how much of a boost each brand delivers, how stable that boost is likely to be in the future, and how much those future earnings are worth today. <snip> A belief in the power of brands and brand management has spread far beyond the traditional consumer-goods marketers who invented the discipline. For companies in almost every industry, brands are important in a way they never were before. <snip> Without trusted brand names as touchstones, shopping for almost anything would be overwhelming. Meanwhile, in a global economy, corporations must reach customers in markets far from their home base. A strong brand acts as an ambassador when companies enter new markets or offer new products. It also shapes corporate strategy, helping to define which initiatives fit within the brand concept and which do not. That's why companies that once measured their worth strictly in terms of tangibles such as factories, inventory, and cash have realized that a vibrant brand, with its implicit promise of quality, is an equally important asset. A brand has the power to command a premium price among customers and a premium stock price among investors. It can boost earnings and cushion cyclical downturns--and now, a brand's value can be measured. << Below are the top 10 Brands (and other tech companies in the Top 100) as determined by Interbrand with a "Brand Value" attached to each. Note that the 4 traditional Silverbacks (Microsoft, Intel, Cisco, Oracle) are in the top 25, as is IBM, King Nokia and HP: The Top Ten Global Brands Rank Brand 2001 Brand Value ($Billions) 1 Coca-Cola 68.9 2 Microsoft 65.1 3 IBM 52.8 4 GE 42.4 5 Nokia 35.0 6 Intel 34.7 7 Disney 32.6 8 Ford 30.1 9 Mcdonald's 25.3 10 AT&T 22.8 Other Technology Brands In Top 100 15 Hewlett-Packard 17.98 16 Cisco 17.21 20 Sony 15.01 24 Compaq 12.35 25 Oracle 12.22 32 Dell 8.27 42 Samsung 6.37 45 Xerox 6.02 49 Apple 5.46 53 Sun Microsystems 5.15 64 Texas Instruments 4.04 66 Motorola 3.76 72 Panasonic 3.49 98 Siemens 1.03 Data: Interbrand, Citigroup ### - Eric -

To: hueyone who wrote (48801)	11/12/2001 5:23:58 PM
From: Pirah Naman	Respond to of 54805

Some Buffett Lyrics: When managers want to get across the facts of the business to you, it can be done within the rules of accounting. Unfortunately, when they want to play games, at least in some industries, it can also be done within the rules of accounting. If you can't recognize the differences, you shouldn't be in the equity-picking business. -Pirah

To: hueyone who wrote (48801)	11/19/2001 11:14:51 AM
From: Wyätt Gwyön	Respond to of 54805

The relevance of this going forward, is that if investors decide not to accept pro forma shenanigans and decide to price companies to reasonable economic value, then many of these companies will fall again. It is a risk that needs to be acknowledged. if stocks need to fall to be valued according to "reasonable economic value", then conversely, what would it take for them to rise further (the only reason to buy them, presumably)? it would take, obviously, a further separation from said REV. in other words, one must rely on a greater fool. assuming one's assessment of REV is in the ballpark, is there any other way to grow? a premium to NPV would seem to imply borrowing from future returns.