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

To: Stock Farmer who wrote (49375)	12/7/2001 6:17:51 PM
From: Seeker of Truth	Respond to of 54805

We look at various aspects of a stock before we buy or hold. One is the growth rate of the free cash flow. Another is the return on assets. Yet another is the return on equity. Also the debt level is extremely important. Also the price in comparison with the growth rate of the free cash flow. When a stock passes all these tests then we look at the technology, the GAP etc. I suggest yet another measure, let's call it the frankness number. Buffett said he likes a frank and open annual report such as a partner would make in a small business. Instead we are almost invariably treated to a bombastic peaen of self praise. Beware the following, a tremendous emphasis on the growth of sales, triple fortissimo, then forte on the growth of income, finally in smaller print, piano or even pianissimo, the growth rate of the earnings per share. This is necessarily ALWAYS the smallest figure. That's because of dilution due to acquisitions and options. Such an annual report is an attempt by management to SELL the shares to us. Another much smaller detail is the universal use of a weighted average of the number of shares outstanding. The net income of the company is divided by this weighted average to give the so called per share earnings. But what we are buying or holding is the stock at the end of the period when the earnings per share are less, since the divisor has grown. Unfortunately the hucksters have made the accountants approve this latter trick. But there is absolutely no law requiring the companies to report their earnings per share in this way. Take a look at the annual reports of your favorite companies. Do they pass the frankness test?? If they do you have a management with an excellent attitude. Just one more caveat. Good luck to all. Malcolm

To: Stock Farmer who wrote (49375)	12/7/2001 7:27:24 PM
From: Bruce Brown	Read Replies (1) \| Respond to of 54805

As of Nov 30 statement, my investment portfolio distribution was 18.44% cash & t-bill money market, 48.07% fixed income (mostly long gov't bonds), 19.96% preferred shares, 9.38% common shares (sorry, no gorillas - mostly blue chips), 3.75% mutual funds and 0.40% other. Zero debt. No wonder you don't scream during an orgasm. ;-) BB

To: Stock Farmer who wrote (49375)	12/8/2001 12:54:15 PM
From: BirdDog	Read Replies (2) \| Respond to of 54805

This begs the question "why is there a lack of business spending". It's not because consumers reduced their spending, it's because consumers didn't increase their spending enough to make businesses profitable!!! I beg to differ. If you remember back in June of 2000. When Greenie increased rates by 50 basis points. I think that was to send out a message to companies. That message was: You will quit spending on IT. You will offer up those high flyers in the NASDAQ as a sacrifice to the economy. This is because we fear the great wealth and spending their stock values have created. And if you don't stop your spending, we will increase rates till you are yourself destroyed. This is because we cannot tolerate economic growth at this rate. Companies cut IT spending drastically. By late winter 2001, IT companies were saying it was as if customers had closed the door. It was as if they just quit spending on anything. The whole thing was due to fear. Then, when the stock market kept dropping. Consumer spending increases did drop off. This is because the people didn't have their investments doing great. They didn't feel as though they could spend and not worry about saving more of thier income. They also had stopped spending extra growth in their savings. The whole thing is a domino effect based on fear. Fear of the Fed. destroying the economy. Now they are trying to reverse the domino effect. They better keep working their hineys off. The government started it. Don't ever forget those famous words from Billy bob Clinton. At a news conference. Just a few days before the Feds. first surprise rate cut in Jan. 01 . While pointing at a chart he said: "There's nothing wrong with the economy." With his famous finger waving at the camera. BirdDog