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

To: Bruce Brown who wrote (49392)	12/8/2001 9:46:09 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 54805

Although Mucho will be down my throat for 'ex ante' data mining, it will be interesting to note over the next few years what the last 52 week lows will look like in comparison to the future prices when we think of those lows reached to date like no, i won't be down your throat--i'll be begging you...to get a copy of that data miner that can predict the future! that would be one dang useful device. my prediction, for what it's worth, is that the majority of those cos you mention will all break through to new lows eventually, most well into the single digits. i give this prediction a shelf life of 10 years.

To: Bruce Brown who wrote (49392)	12/9/2001 12:33:57 AM
From: Thomas Mercer-Hursh	Respond to of 54805

Although Mucho will be down my throat for 'ex ante' data mining, it will be interesting to note over the next few years what the last 52 week lows will look like in comparison to the future prices when we think of those lows reached to date like Microsoft at $40, Intel at $18.96, Oracle at $10, Cisco at $11, Siebel at $12, Brocade at $12, Qualcomm at $38, i2 at $2.98, Checkpoint at $19, Dell at $16, Juniper at $9, BEA Systems at $9, Arm Holdings at $8, Sonus at $2.26, IBM at $80, eBay at $26, etc... - and don't forget Nvidia at $13.75! Perhaps you should create a "what if I had bought XXX at YYY portfolio"?

To: Bruce Brown who wrote (49392)	12/9/2001 1:17:09 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 54805

whew... yours was a long post. Just a few highlights. Regarding home builders and Calaway and... I don't invest in what I don't understand, and the market is so broad that there are many such opportunities. As to looking for x to meet y, we are all guilty of application of bias in our screens. Thankfully, the market is broad enough for this to be a survivable flaw. For example, even amongst a narrow criteria (such as "blue chips") there are more than enough candidates that only a few are necessary to achieve most investment diversification needs. Mine certainly. You wrote: Whether we zero in on the cash flow, lack of debt, category dominance or flip the coin and focus on all the negative issues - one still has to decide if the shares are a vehicle or not a vehicle for capital appreciation going forward to meet certain goals. Absolutely! We are fully aligned on the important decision. Although I would suggest it's not "Whether" ABC "or" XYZ, but all of the above, plus more. And in balance. It is the whole coin we are flipping for :) [As an aside, under the heading of "no debt" you are apparently oblivious to the fact that "paid in capital" is a form of debt. As another piece of trivia, it has the curious characteristic of having negative carrying cost to the company. And most shareholders' eyes glaze over long before they recognize the significance of this item on the balance sheet. So it's a great spigot onto which the cash guzzler can be attached] Yet, I would be curious if you think your P/E criteria will be met by any of today's "healthy gorillas"? Firstly, there is a possibility that you missed a very subtle element in my criteria by merely focusing on price relative to profitability. I also mentioned growth relative to risk. I have no difficulty paying more today for the prospect of future gains tomorrow. That is what the equity market offers over and above the bond market. But it is hard to shell out extra for growth that a CEO says "will be there... but we have no visibility". Which is indistinguishable from wishful thinking. So, with respect to: Yet, I would be curious if you think your P/E criteria will be met by any of today's "healthy gorillas"? Secondly, my answer is yes. Assuming of course that you add in the missing elements of risk and growth. I would also caveat my answer with "but not in the next day or so". Otherwise I might be wasting my time on this thread. Your list of prices (Microsoft at $40, Intel at $18.96, Oracle at $10, Cisco at $11, Siebel at $12, Brocade at $12, Qualcomm at $38, i2 at $2.98, Checkpoint at $19, Dell at $16, Juniper at $9, BEA Systems at $9, Arm Holdings at $8, Sonus at $2.26, IBM at $80, eBay at $26, etc... - and don't forget Nvidia at $13.75)is noteworthy. Yes, we could go back and pick annualized rates of return from these points. But I suggest to you that this is irrelevant except to those who actually established long positions on exactly those prices and still hold them in these distant future moments of comparative evaluation. Those who entered later will see lesser returns. Those who came before must also add in an infinite number of alternative hypothetical scenarios, which also include the opportunity cost of not selling at intermediate points. Which for some includes the bubble peaks. You can not select hypothetically from one advantageous datapoint without allowing me the honor of selecting alternatively advantageous datapoints in contrast. And we should be intelligent enough not to enter the zone of meaningless past hypotheticals. Instead, I just focus on my opinion today. Which is that if you buy any of the stocks you list, with the possible exception of MSFT, that I will have several opportunities in the future (name a long term time period, actually) to establish a position that will have greater average annual return by NOT investing today and waiting until then... parking money meanwhile. I offered up my "anal" portfolio to demonstrate that not only do I have this opinion, but that my money is parked accordingly. I own shares from a variety of cost basis issues dating back to before I had children and even before the previous recession in some cases. We are very similar in this respect Bruce. Although I liquidated the vast majority of my tech stuff. And then I asked: What kind of multiple do you think is proper for a cyclical company at its peak? At its trough? When do you think MSFT, ORCL, CSCO and SEBL will put in their next cyclical peaks? Although your response was interesting, as figure skating goes, I am more interested in your answer than that you could answer it. Is the market doing a good job at the moment of forecasting any sort of expansion, or should we simply ignore the market and wait for the evidence to be presented? I note that you focused on the market's predictive power relative of the collapse in earnings at the peak of the bubble. Versus outlining the market's predictive power during January 2000, for example. Even if I believed that the market was predictive, a more important question back to you would be: what makes today's market a better predictor than it was in January 2000?