Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Seeker of Truth who wrote (51881)	7/5/2002 3:48:28 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

Thomas, you are absolutely right. I just had to quote that so that I could see it in the thread listing twice! Unless you are content to buy only once in eight years, we have to get involved with "almost sure' (??) things. This thread explores the potentials of the gorillas. I think the case for the gorilla characteristics of the set {INTC,CSCO,SEBL,MSFT} has been well made here. I think there are very interesting tactical and strategic questions here. For example, why would you insist on SEBL at 10 to 12 times current earnings when you know that current earnings are artificially depressed by the current down cycle? Why is $12.50 not good enough instead of insisting that it get down to single digits? If you are confident that it is a company with the kind of 5 year growth prospects that we associate with Gorillas, then how big is the risk at $12.50? I think we all believe that a gorilla has a better chance for a strong recovery than a normal company. So, this would seem to imply that, if we can get a "good" price on a proven gorilla during this down period, this would be an indicated buy. But, how certain are we that we will still regard all current gorillas as gorillas in two years? Take, for example, the case of JDSU, once broadly recognized as a king here. Certainly its price has gotten down to extraordinarily low levels lately. Do we believe it has lost its kingship or are these good buying opportunities? Or is it just that we think it will take "too long" for it to get back to growing strongly? And what about companies which had not achieved gorilla status before all this happened? What is happening to them during this period? Are there signs we could be looking for of them consolidating their position and being poised for becoming clear gorillas once things start moving again? E.g., ACTU, my candidate, has a stronger market position now than they did before even though revenues have been pretty flat. Isn't that an indication that having their price down in the $4 range might make it attractive?