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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Bob Rudd who wrote (17235)	6/13/2003 11:51:31 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78753

Grommit can answer for himself, but since I have this on half-avoid :-))), I'll give my take. Service companies are "bad", because: a. they are dependent on human capital. If the best people leave, company crumbles. In reality, this may not be a big issue, since mass exodus is infrequent, but its ghost is there. b. presumably it is easier to compete in services than in widgets. This also may be a fallacy, but presumably entering service area requires less capital and so is more open, fewer entry barriers. c. services are less differentiable than widgets. I don't care if CPA A or CPA B does my taxes. This may be a fallacy too - see example above, won't you prefer the CPA you know? d. there are fewer benefits of growth. A large widget maker saves on the economies of scale, can muscle suppliers and distributors. A large service organization competes with itself (think realtors) and does not necessarily gain any benefit (CPA Old Friend Bob vs. HR Block CPA Who Cares). e. it's easier for investor to learn the quality of widget than the quality of service. f. they manufacture something ephemeral instead of something physical - and some people have problem accepting this as a product. Most of the above are fallacies, but they have also some grain of truth. Jurgis

To: Bob Rudd who wrote (17235)	6/14/2003 8:11:57 PM
From: Grommit	Read Replies (1) \| Respond to of 78753

avoids - my comment was somewhat tongue-in-cheek, but hopefully with some grain of truth in it. Jurgis's answer was fine. I think barriers to entry are a factor in my thinking. And J Clarke's comments are good too. There are no rules here that cannot be overcome. But in looking just now, I do not have a single service company in my portfolio. So evidently, I have this rule hard-wired into my mind set. So perhaps the bar is raised or lowered by all of us based on our personal preferences and prejudices for each individual piece of data. Q: Is being a cliche expert a full-time job? A: Bottom line is I have a full plate 24/7. Q: Is it hard to keep up with the seemingly endless supply of cliches thatspew from business? A: Some days, I don't have the bandwidth. It's like drinking from a fire hydrant. Q: So it's difficult? A: Harder than nailing Jell-O to the wall. Q: Where do most cliches come from? A: Stakeholders push the envelope until it's outside the box. Q: How do you track them once they've been coined? A: It's like herding cats. Q: Can you predict whether a phrase is going to become a cliche? A: Yes. I skate to where the puck's going to be. Because if you aren't the lead dog, you're not providing a customer-centric proactive solution. Q: Give us a new buzzword that we'll be hearing ad nauseam. A: "Enronitis" could be a next-generation player. Q: Do people understand your role as a cliche expert? A: No, they can't get their arms around that. But they aren't incented to. Q: How do people know you're a cliche expert? A: I walk the walk and talk the talk. Q: Did incomprehensibility come naturally to you? A: I wasn't wired that way, but it became mission-critical as I strategically focused on my go-forward plan. Q: What did you do to develop this talent? A: It's not rocket science. It's not brain surgery. When you drill down to the granular level, it's just basic blocking and tackling. Q: How do you know if you're successful in your work? A: At the end of the day, it's all about robust, world-class language solutions. Q: How do you stay ahead of others in the buzzword industry? A: Net-net, my value proposition is based on maximizing synergies and being first to market with a leveraged, value-added deliverable. That's the opportunity space on a level playing field. Q: Does everyone in business eventually devolve into the sort of mindless drivel you spout? A: If you walk like a duck and talk like a duck, you're a duck. They all drink the Kool-Aid. Q: Do you read "Dilbert" in the newspaper? A: My knowledge base is deselective of fiber media. Q: Does that mean "no"? A: Negative. Q: DOES THAT MEAN "NO"? A: Let's take your issues offline. Q: NO, WE ARE NOT GOING TO TAKE MY "ISSUES" OFFLINE. A: You have a result-driven mind-set that isn't a strategic fit with my game plan. Q: How can you live with yourself? A: I eat my own dog food. My vision is to monetize scalable supply chains. Q: When are you going to quit this? A: I may eventually exit the business to pursue other career opportunities. Q: I hate you. A: Take it and run with it.