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

To: Philip H. Lee who wrote (2899)	1/1/1998 2:40:00 AM
From: James Clarke	Read Replies (1) \| Respond to of 78525

Nice post, Phil. As long as we're going to set ourselves up to look stupid in a year, here's mine. 1. The U.S. market comes back to earth. The Dow hits 6000 and Business Week has a cover with a bear on it. 2. Asia looks no better in a year than it does now. 3. Small stocks have a great first quarter, then get out. 4. REITS outperform GE and Coca Cola. 5. Philip Morris and Boeing are the best stocks in the Dow. GE and Allied Signal are the worst. 6. Mutual fund outflows are going to become a big issue. 7. My best buy idea is St. Joe Corp. Short Kelloggs. Since I make my living as a stock analyst, I would gloat intellectually, but panic personally should these come true. At least when I am out begging for food I can point to this post and say that I was right. Anyway, happy New Year. And let's keep this great board going strong. Thanks Mike. A bear market will be painful, but that's when value investing is the most fun (so I've read). I know Mike is itching for a real drop. None of this 10% and then bounce crap. A nice 20% drop, followed by a slow, agonizing 20% fall. Coke at 40. Nike at 22. Philip Morris at 28...AND HYDE AT 4!

To: Philip H. Lee who wrote (2899)	1/1/1998 10:41:00 AM
From: Dan Packer	Read Replies (2) \| Respond to of 78525

>>1. Electric Utilities will be hot (on a risk/reward basis), with total returns of 20-35%.<< Your previous post indicated that you have a large portfolio weight with this concept in mind. Perhaps you can elaborate. Although the general concept seems valid, I personally don't know how to choose the winners. In my limited experience from California, there are many unknowns even at this stage. The old-line utilities cannot compete. They did well in a monopoly situation harvesting 11% on depreciated book. There appear to be huge stranded costs aside from nuclear. It's possible that upper management has been re-educated, but I wouldn't bet the farm on it. SCEdison appears to be throwing the baby out with the bath water in the few small situations I am familiar with. SDG&E and PG&E appear to be making superficial changes. They don't seem paranoid enough to thrive in competition. They appear to be getting out-flanked by such large power users as water agencies. There are lots of rogue power brokers out there working deals with the big users. There are multi-level marketing scams targeting the individual consumers. In California the PX is put off another quarter, meanwhile the old line utilities are having to roll back prices by 10%. At some point folks may realize that the utilities have been screwing them all along - potentially a public relations disaster. I really don't know how you pick a winner for a passive investment today. Dan

To: Philip H. Lee who wrote (2899)	1/1/1998 11:01:00 AM
From: Dan Packer	Read Replies (1) \| Respond to of 78525

<<2. Internet stocks will be one of the hottest sectors of 1998.>> Undoubtedly this is correct. Once again, which one's? In my limited experience, the barriers to entry continue to be quite low. I read the HotMail purchase by M$FT slightly differently. I think that it indicates that M$FT perceives that it is generating lots of cash flow from its Win monopoly, and cannot compete outside of it. If news reports are correct - $800 million for WebTV and HotMail, plus $125 for a piece of Apple. Go figure? The internet still seems to be driven by 'avoided cost', there will be a zillion companies entering and leaving. How to pick a winner? I guess try to find one that Paul Allen has failing investment in, for M$FT to invest in. For me, I just look to see what NT 5.x will target. M$FT is serious, and focused on this. Cheers, Dan

To: Philip H. Lee who wrote (2899)	1/1/1998 11:17:00 AM
From: Dan Packer	Read Replies (1) \| Respond to of 78525

<<6. My favorite company for 1998 is Checkpoint Software (CHKPF).>> Good idea - great sector. My only caveats would be that this is a foreign software company with one product sporting a PSR of 20 that has 1 million+ shares owned by the Vinik outfit (If you've ever been pumped and dumped by them, you'll remember.) Do you think M$FT will add the fire wall stuff to their NT server product? Wasn't it fun choosing companies that added functionality to DOS, as M$FT bundled it in with each new spin? Not! (A fun place to play these days is the database sector, as M$FT drives NT that hooks up best to its own SQL stuff - ask Oracle, et al about how much fun they're having these days.) BTW, there are >100 form 144 filings for CHKPF. I do not have access to them. Can you summarize? Dan

To: Philip H. Lee who wrote (2899)	2/10/1998 1:27:00 AM
From: Philip H. Lee	Read Replies (1) \| Respond to of 78525

Utilities: short-term outlook. The sector appears to have corrected a sufficient amount, and now could a good time to enter for many stocks. I've accumulated a good amount of 4-6 month calls on the largecaps in the sector at good limit prices, and I placed some market orders early Monday since I think a rally is close at hand. This year, I expect utilities to replace real estate investment trusts as the high-yield investment of choice. Philip Disclaimer: Invest at your own risk. Information not guaranteed to be accurate. Information provided for discussion purposes only and not to be construed as investment advice.

To: Philip H. Lee who wrote (2899)	2/27/1998 2:10:00 AM
From: Philip H. Lee	Respond to of 78525

Progress Report on my "1998 Outlook," as posted on 1/1/98. So far this year, all of my 6 predictions have been on the mark, except for Checkpoint having only a small gain. I will be updating my 1998 Outlook shortly. Here's the YTD data compared to my 1/1/98 statements: >1. Electric Utilities will be hot (on a risk/reward basis), with total returns of 20-35%.< The Telescan Electric Utilities Index (.UOP) on January 1st was 86.15; today it's at 89.87. YTD gain = 4.3% , annualized gain = 28.9%. >2. Internet stocks will be one of the hottest sectors of 1998.< ISDEX internet stock index on January 1st was 99.87, now at 130.22. YTD gain = 30.4%, annualized gain = 491%. >3. The Nikkei, surprising almost everyone, will surge to 20,000.< Nikkei on January 1st was 15,280; now at 16,832. YTD gain = 10.2%; annualized gain = 78.6%, and annualized year-end close of 27,300. >4. Secondary stocks will have a very good 1st quarter.< The NASDAQ and Russell 2000 have obviously surged after a weak December and early January. >5. The Dow will reach 10,000.< The Dow is up YTD 6.8% from 7950 to 8490; annualized close would be 11,800. 10,000 appears possible. >6. My favorite company for 1998 is Checkpoint Software (CHKPF).< After closing 1997 at around 40 3/4, Checkpoint plunged to around 30 1/2 after a wicked downgrade, but has recovered strongly to 41 5/8 now. Virtual Private Networks are still a hot growth area, and Checkpoint's firewall market share still leads the pack by a wide margin. ----- Sources: My 1998 Outlook, as posted on 1/1/98: Message 3071452 Graph of Electric Utilities Index .UOP: tscn.com Internet Stock Index price and stock components: fast.quote.com January 1 price: internetnews.com Nikkei graph tscn.com Russell 2000 graph tscn.com NASDAQ graph tscn.com Dow graph tscn.com CHKPF graph tscn.com Philip Disclaimer: Invest at your own risk. Information not guaranteed to be accurate. Information presented for discussion purposes only and not to be construed as investment advice.