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

To: Wyätt Gwyön who wrote (49380)	12/8/2001 8:14:45 PM
From: Bruce Brown	Read Replies (2) \| Respond to of 54805

do you think the cyclical nature of Intel will prevent it from ever selling at less than eight times sales? Depends on the longevity of the TALC for the microprocessor and the other avenues that Intel has expanded into which drive or don't drive the future as it approaches. Although each peak and valley may or may not present "ideal" opportunities for investment or exit from some of these equities - Microsoft, Intel, Cisco and Oracle (those we consider the Silverback gorillas) all reached points that may have presented opportunity. Be it Microsoft at $40, Intel at $18, Cisco at $11 or Oracle at $10 (which just broke up through its downtrend line on good volume this past week) - one could have argued about those opportunities before they were hit, while they were being hit or after they were hit. I doubt there is any reason to agree upon an exact PSR for Intel vs. another semiconductor company. We could factor in the premium for the category leader and a lot of other items with a lot of banging of our heads and probably not reach an agreement. In the meantime, what is the market saying about it? [You should have been snatching up the homebuilders in October] more data-mining. you might as well say, "you should have been purchasing Enron at 26 cents and tripled your money in a week". Do you want the standard "GFY!" response, or did you miss that John had clearly mentioned his criteria concerning a P/E valuation and growth risk ratio that led me to mention some stocks in a group that may appear to have such a value - even after their rise from lows reached in the September/October/November time frame? I don't think Enron has anything to do with the health of the homebuilders and my mention of the builders should in no way have been interpreted as such. And no, I would not have advised anyone to speculate in any stock undergoing any sort of a Chapter 11 routine. The homebuilders are one of the groups I have followed since last year. I don't follow all of the companies in the sector, but I do closely track and follow a core group of companies I chose for their diversity which includes BZH, CTX, RYL, LEN, KBH, NVR, PHM, TOL, CMH (the only one in the group that carries more than a single digit P/E), MHO and the S&P Home Building Index (^SPHOME). You may or may not agree with my premise of following and tracking a group to look for signs of strength or weakness, but it is now part of my routine - both on a fundamental as well as a technical basis. I currently own Beazer and Ryland following the post attack sell off as the valuations and backlogs due to mortgage rate driven demand hit levels that encouraged me to take advantage of the opportunity based on the risk/reward scenario - and no, neither were purchased at the exact lows in that sell off. I doubt they will be sold at the exact highs either, but that's okay by me. you can say anything you want after the fact, but it proves nothing about what to do ex ante. It doesn't matter to me. If you would like to view some of my posts regarding the home builders over the past year (non "ex ante"), I would be happy to provide you with links to those posts where a group of us were discussing the group on a different message board in the early part of the year, during the summer as the group was beginning to "roll over" on a techincal basis and more recently as the companies have been talking about their backlogs, guiding earnings higher and discussing the prospects of future business. Beazer and Ryland are currently residing in my portfolio on the long side. Would you like me to tell you when and why I am going to sell them before the fact? If the group begins to show weakness and fails to hold the technical strength of some of the key levels that have been approached recently or are about to be approached - my trailing stops will most likely protect some of the profits I have built since my purchase. Likewise, we could launch into a discourse on the historical performance of the group during various periods of the business cycle and compare the make up of each company to see if and why some managements made the move to diversify their company during the past decade to smooth out some of the nature of doing business in the homebuilding sector. Or we could just wallow around and throw cheeze curls at "CNBS" all day, use the world bubble in at least one complete sentence per day, yelp about the demise of the economy, blow hot air about Argentina, flip the bird at the Xbox related companies, grow our facial hair like Tice or our head hair like Fleckenstein (that man has great hair), figure out possible ways to get Roach back in the dry cleaning bag until the next recession, sing songs about Qualcomm's presentation of their pro-forma data in an enlightening manner, contemplate the end of this world and the next or simply stew for the sake of stewing. Yet, most of that is OT for this board. If you have news that the world views Intel in the year 2001 exactly the same as the world viewed Intel in the previous recession of the early 90's following a decade that saw a few more computers enter into the use of our daily lives and Intel's dominance become known to all - be my guest to outline your case why Intel in 2001 is "required" to reach a level of PSR that would stop the cheeze curls from flying. The share price was down there at $19 recently which is a share price level we saw in 1997 and 1998. Where will the share price of Intel be in 2005 and what are the prospects for the various lines of business that management is targeting in the server side, the mobile side, the desktop side, etc... ? BB