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To: SKIP PAUL who wrote (20202)	12/21/1998 6:41:00 PM
From: Ruffian	Respond to of 152472

Nice Plug For The Q> (at bottom) Posted 12/14/98 Archives See past Careful Investor columns. W E B S I T E S World Equity Benchmark Shares R E L A T E D A R T I C L E S A mutual fund alternative: unit investment trusts Careful Investor Put a little growth in your portfolio Even careful investors should consider adding balance to their holdings. Keep index funds as a core, then build with pricier long-term stocks. By Mary Rowland This year when I revised a book I wrote two years ago on mutual funds, I was surprised to see how much of my enthusiasm for funds had waned. Funds have grown increasingly expensive and few of them beat the market indexes reliably. Further, most fund managers trade too much, so their funds throw off taxable capital gains even when the fund has a bad year. All of these things prompted me to revamp my retirement portfolio (see Index funds are solid core of a careful portfolio). I figured out what I had in there, tried to rationalize it and maybe to spruce it up a bit and then dump the ones that no longer made any sense. In short, I did all the things that I'm always urging you to do. If I were starting fresh, I would buy the Vanguard Total Stock Market Index Fund (VTSMX) as a portfolio core because it represents the entire market -- with a slight bias toward large stocks -- at a low cost. Then I would add a few other concentrated funds and some individual stocks around it. But I'm not starting fresh. And I'm unwilling to completely decimate my portfolio. That would be expensive, and not particularly smart. So I've got to work from what I've got, based on the changes I am willing to make. I already have some large- and small-cap funds that will serve to cover those particular investment sectors of my portfolio. That gives me an opening to go after some of the stocks that I think are particularly attractive in the S&P, since I'm not really covered in that category. (I would have been had I invested in an index fund.) 4 funds provide good coverage So with that in mind, I will keep my 200 shares of Dodge & Cox Stock Fund (DODGX). I bought Dodge & Cox years ago and I like it. It's a good, solid value player with a team management approach that keeps it on course and expenses are low -- under 60 basis points. I'll also keep my 700 shares of Oakmark Small Cap Fund (OAKSX), 400 shares of Third Avenue Value (TAVFX) and 450 shares of Third Avenue Small Cap (TASCX). These four funds cover the large-cap, mid-cap and small-stock universe, albeit from a value approach. I'm happy with all of them and I'll build from there. But what I'm going to build with is stocks. And since I've got my value and small caps covered, I'm going to use this opportunity to look at large-cap growth stocks that would have been covered if I had totally revamped my portfolio and created an index fund based on the S&P or the Wilshire. If I had switched to an index fund, I'd have to think more critically about picking value stocks or companies not represented in the S&P 500 (SPX). Do I think I'm a better stock picker than Bob Stansky at Fidelity Magellan (FMAGX)? Hardly. But I do know how to buy and hold. Too many portfolio managers trade too much, racking up big trading costs with our money. And Stansky's fund is so huge that he's forced to compromise on his investment strategy, sometimes purchasing or holding stocks that he probably wouldn't keep in his own portfolio. I'm not a trader. And I won't get the kind of returns that Jim Jubak and Jon Markman can get. I can't stomach that kind of volatility. I'm not a trader. And I won't get the kind of returns that Jim Jubak and Jon Markman can get. But I can't stomach that kind of volatility, either. So I looked for stocks that I thought would appreciate over the long term. How to decide? No retail stocks for me. They're too fickle and I don't understand what makes them work or fail. Because my mutual funds cover the bases for value investing, I think my stocks should be growth players. Yes, I know this runs counter to a value investor's basic strategy. But do value investors only have to purchase the downtrodden? The real thesis behind a value investor is purchasing stocks that you believe will beat the market over the long term. It's a theme that William Miller, a value investor guru, has successfully employed at Legg Mason Value Trust (LMVTX) for years. His top holdings hardly look like a value investor's portfolio with the likes of Dell (DELL) and America Online (AOL). [You can see the top 10 holdings of any fund by selecting "Top Holdings" from the left side of your screen after you've clicked on a fund.] I already own 100 shares each of Intel (INTC), Microsoft (MSFT), Boeing (BA) and Pfizer (PFE). I chose those stocks just as any other fundamentalist would. I reviewed the companies' history, decided whether I think there is a long-term upside to the stock price, and tried to determine if they're market leaders within their industries. In each case, the answer was yes for these four. So I decided I needed to get involved in Internet and wireless stocks. This is the future and arguably the present. But I can't buy companies like Amazon.com (AMZN) that have no reported earnings, even if its shares have outperformed nearly every stock on the planet. What I want are some companies that play on communications technology, that are about linking up people and networks. New Portfolio Additions Company Report 1-yr Chart Company Report 1-yr Chart Company Report 1-yr Chart Company Report 1-yr Chart Leadership, low debt and strong management Motorola (MOT) is a good example. But that is a value stock right now. It's a good company, I think, but a turnaround play. It's not the market leader in any single category, although it could become one if management does its job right. But that's a big if. Instead, I bought 100 shares of Qualcomm (QCOM), a company in the wireless phone business as well as 100 shares of TranSwitch (TXCC), which makes chips for networks. Both of these companies show strong growth potential and have carved out niches that will serve them well, augmented by very strong management teams.

To: SKIP PAUL who wrote (20202)	12/21/1998 6:59:00 PM
From: JGoren	Respond to of 152472

I think that you are unfair to DoCoMo and other operators. They are not experts in the technology. They are basically marketers, retailers. They have close relationships with their vendors on whom they depend. The break occurred when DoCoMo finally realized that Ericy had misrepresented the IPR situation, that Ericy could not bring forth W-CDMA because it could not avoid Qcom IPR. Other carriers see cdma as a threat and have wanted to slow the growth of cdma (e.g., in US, Sprint) because of direct competition. Look back at Perry LaForge's posts on Friday and I think you will get a more detailed view of the carriers approach. Indeed, he relates how some carriers have repeated certain mantra, relying on what they had been told about the ETSI written W-CDMA proposal, without realizing what the ETSI proposals actually contained. I am not saying that in some instances some carriers may be so "in bed" with the vendors that they are engaging in a conspiracy but it is unfair and, I believe, inaccurate to say that most are.

To: SKIP PAUL who wrote (20202)	12/21/1998 8:00:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 152472

Conspiracy or not? Just for grins, my suspicions as to what is happening: 1) Early 98 - Ericsson proposes a W-CDMA different from CDMA-2000 and says it has IPR and that its standard will have no trouble going through the ITU. NTT, European operators et al don't know and don't care about IPR, and so they just follow. After all Ericsson is one of the biggest in the world and must know what they are doing. Right? Also remember that NTT DoCoMo is Japanese and hence likes consensus. 2) Mid 98 - Qualcomm says must have convergence, and that it has IPR to block both ITU and deployment. Ericsson says 'don't believe them', so the operators continue happily along for the same reason as above. 3) Mid 99 - The American GSM operators, worried about cheap upgrades to 3g from their CDMAOne competitors, back Ericsson. 3) Mid to late 98 - Qualcomm says 4.096 won't give higher performance, and in fact is, for practical purposes, unworkable. Again Ericsson says 'don't believe them'. The operators are starting to worry. In the most built out areas (Europe and Japan) they need a more efficient system. (Note that in Japan NTT is worried about a system that gives their competitor an advantage, but unlike their American counterparts they are against the wall on capacity.) But even though the operators are starting to worry they still trust Ericsson. 4) Charlene, letters in pocket, starts making the rounds talking about collusion among European cell phone manufacturers and restraint of trade. Big worry to all European and Japanese manufacturers, but really, really big worry to Ericsson which has no fall back position since they are the only major manufacturer without CDMAOne capacity. 5) ITU says there will be no 3g CDMA standard 6) Not a peep out of the CDMAOne vendors since they know that they have an upgrade to 3g with or without ITU, but the overloaded operators (none of which are CDMAOne<g>) are really sweating now. 5) Late 98 - Ericsson, shows the first, inevitible cracks. Says lets do 3.84. Lets drop several of the patent suits. This completely blows the overloaded operators trust in Ericsson. 'Why didn't Qualcomm blink?' they ask. 'Didn't Ericsson say 4.096 was a performance issue and that they had it in the bag?' 6) Late December 98 - Schism. The overloaded operators must have a more efficient standard, although they don't really care which one. (NTT may have a preference for non-CDMAOne compatible, but that preference is second to the need for some/any standard.) They absolutely need it since both Europe and Japan are more densely populated and have much higher penetration rates. And now they trust Ericsson not at all. This is not the same as saying that they back CDMA-2000, but now they really will start looking for a compromise, and they won't trust Ericsson for information about IPR and capacity. Once they finish their homework (betcha a lot of lawyers and engineers are getting a workout right now) they will then converge on CDMA-2000 or something very similar. Clark PS I think the kicker is the letters mentioned by Perry LaForge. Although not currently being used as a weapon, they are like a backup doomsday device aimed at Ericsson. They absolutely cannot win. The only question is how long Ericsson will take to admit this to themselves, and will they try to take the whole world with them in some kind of trade war. PPS I made a prediction on the Nokia thread that before the end of the year we would see 4 (or more) announcements from the Ericsson team, but none from the IS-95 camp except as calmly worded rebuttals. The French announcement counts as 1. Only three more to go.