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Technology Stocks : Gorilla Game -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (265)	7/25/1998 9:23:00 AM
From: Mike Buckley	Respond to of 387

I've just gotta reiterate the importance of what Lindy sez: >>Those who have not read the book may think I am nitpicking over details, but it is really necessary to understand the differences if you are going to make investment decisions based on them.<< He's not nitpicking in the slightest. If you're making investment decisions based on gorilla-game thinking, ya gotta read the book. It's that simple. --Mike Buckley

To: LindyBill who wrote (265)	7/25/1998 12:57:00 PM
From: Shane M	Read Replies (1) \| Respond to of 387

I also am interesting in Boeing, but I don't think the Gorilla game applies to such companies, but some of the concepts can still be applied. Only real compeitior is Airbus, although I think Airbus may have a similar market share as Boeing. So here you have an oligopoly, and these kinds of markets tend to have supra-normal returns over the long haul. As you mention, no tornado, but this is still a growth industry, albeit a highly cyclical industry. If you were to compare it to a technology gorilla, you might compare to INTC given high capital expenditures and cyclicality. Switching costs: Again, I'm not intimately familiar w/ the Airline industry, but I understand that switching costs are significant given specific types of maintenance and specialized tools required on these planes. Most Airlines, I believe, would like to fly an entire fleet of one "brand" of plane for this reason. Proprietary Tech: Unsure of the analogy here. Don't know enough about patents, trade secrets, and specialized processes at Boeing, but some of this is likely there. This said, from a numbers perspective, Boeing still seems expensive to me at current levels, despite the recent price drop. Even if they meet next year's estimate of around $1.50 EPS they're trading at a forward PE of around 26. That's expensive for a company having the problem Boeing is currently having IMO. Shane