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

To: Bruce Brown who wrote (49426)	12/10/2001 10:46:15 AM
From: JHP	Read Replies (1) \| Respond to of 54805

BB why do you keep listening to a guy who did not see the tech recession coming? Why should you trust his thinking this year when he has been so wrong for so long? is it just hope? <<Here were Geoff's recent comments in regards to the enterprise market: ===== That all said, what I really wanted to reinforce is that I believe 2002 will be THE year of the incumbent gorilla, specifically in enterprise markets. People do not want to add company risk to all the other risks they are taking when they buy enterprise software next year, same with infrastructure, etc. So IBM, Microsoft, Oracle, SAP, Siebel should all have string years in my view. I also believe that the market as a whole should make a good recovery from the bottom, which I think we well and truly hit this fall. If you recall, one lesson of the past two years is that the tornado is not so interesting a phenomenon in the midst of a recession. But when the recession passes, it reasserts itself. What all this means is that in my view conservative Gorilla Game investing has never had a better chance than right now. Best wishes, Geoff

To: Bruce Brown who wrote (49426)	12/10/2001 2:00:13 PM
From: Stock Farmer	Read Replies (2) \| Respond to of 54805

Utmost importance of TALC? Pardon me, but that seems to be somewhat synchronous with bubble thinking. If at this instant I were to offer you $200 for a share of SEBL, or if the best deal going was $2, the independently assessed TALC would not change. But your expected future return on investment over the next ten years would likely be quite different. If instead a disruptive innovation were to appear and flush the basis of SEBL's current TALC down the toilet, expected future profit over the next ten years from this moment's share price would also change wildly. Arguing the order in which the two of us hang is hardly a productive use of our time if we both are condemned to hang together. Or not. Moving on, your use of comparative terms like "low" and "better" without objective reference appears to be merely verbal sleight of hand. Let's say we all agree that 30,000 feet above the ground is high. It would be obvious to even the casual observer that 20,000 feet is "low" by comparison. But it is context that is important. As far as posting Moore's conclusion in my view conservative Gorilla Game investing has never had a better chance than right now. I suppose the appropriate response is "better than what?". [EDIT: But that leads to a completely tangential hypothetical discussion]. So instead I'll see your circular argument (providing Moore as a reference point to Moore's theory) and raise you a point of reference. First by analogy: yes, it's much lower to jump from 20,000 feet AGL than it is from 30,000 feet. However, sans parachute, the results are unlikely to be distinguishable to any meaningful extent. N'est pas? Returning from analogy to topic, and despite the fact that I might have lost the Post The Yardini Data Dash, the fact remains that it illustrates a trend in PRICE that does not support your thesis that the September prices are deserving of the term "low" in any objective or itempotent comparative sense. So buying tech stocks now when forecast earnings have rarely been more expensive (i.e. factor of 4 from objective norms) may be cheaper than buying them at the peak of the biggest tech bubble of all time. Sure. But somewhere between January 1999 and January 2000 is the point of reference that objective data shows is comparable to your terms "low" and "better". So switching metaphors in mid-stream, it is as if you are saying "look, this is the tallest tree here", whilst I agree, but suggest we pan the camera back and show you gesturing towards the biggest bonsai in the greenhouse. In short, yes I agree: prices are "low". But only if you choose the peak of the bubble as your objective point of reference. In terms of the gorilla, expectations may have been set too low. It wouldn't surprise me to see earnings in 2002 and 2003 that surpass current expectations for some of the gorillas. May be true. But again, comparative without reference. By how much? By a penny? By enough to justify a fourfold price per dollar? And then you wrapped it with an interesting caveat: "some" of the gorillas may deliver higher earnings. Would it surprise you if earnings for some of the gorillas come in lower? Bottom line: I agree TALC is the most important business criteria for evaluating the prospective dominance of a Gorilla within its habitat. But getting even the slimmest TALC for free delivers infinite return on investment, and we've seen what happens when one purchases top-of-the-walk TALC at outrageous prices. TALC is more important than price? In an investment decision? No. John