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.

Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: Brian Lempel who wrote (4876)	11/28/1997 5:30:00 PM
From: Geoff Nunn	Read Replies (1) \| Respond to of 8002

Brian - While I know little about Creative Technologies, I know this. The firm does NOT need to diversify. It only needs to do one thing and that's to make a profit, that's why it's in business. Diversification in some instances may be a means to higher profits but it's not an end in itself. Diversification as an end in itself -- if that's what you're suggesting -- is absolutely the wrong reason for a firm to diversify. The danger of feeling that it needs to diversify is that the firm enters wrong businesses and is drubbed by the competition, which is what happened to CT Shareholders can achieve all the diversification they seek simply by investing in a stock portfolio of different companies. In today's financial market this can be done quite cheaply, thanks to declining brokerage costs. Small investors always can choose a diversified mutual fund. Consequently when a firm diversifies, shareholders derive little if any additional value...unless profits increase. Geoff