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

To: jhg_in_kc who wrote (1029)	2/3/1999 6:33:00 PM
From: James Clarke	Respond to of 4691

<<Re: Mattell. Morgan stanley's "Queen of the Net" Mary Meeker Sez: Who will be the losers from the Internet's ascendancy? Meeker points to Mattel, which last week shocked Wall Street with a projection of weaker-than-expected profits and said it was buying the Learning Co., a software maker. "That's a big deal because the root of Mattel's problem is that kids are spending their time differently," Meeker says. To be more precise, kids are spending more time with computers and playing less with Barbie dolls and other toys.>> A beautiful example of why Mattel is (was) so cheap. Everybody thought this, and many still do, but if Mary Meeker had taken the time to make a few phone calls before publishing her uninformed opinion, she would have found out how wrong she is. Mattel (without The Learning Company) had 7 of the top 10 children's software titles last year. 6 of them were Barbie-related. And today they launch a JV on high-tech interactive toys with Intel. Children are spending their time differently, but they are still spending their time, and their parents money, on Mattel products. Mattel is a buy up to 28 in my analysis, though of course the returns ain't what they were when you had a month to do your homework and easily buy it at 22. The train is leaving the station fast on this one. Your risk is that the TLC deal blows up in their face. I think this winds up like Gillette which I missed in the high 30s and is now in the high 50s. Mattel is not a victim of the internet, they are a beneficiary. Their website is one of the best executions I have seen from a consumer product company. Mary Meeker has no idea what she is talking about on this one. Toys R Us is what gets hurt by the internet. I got my mother into Mattel at 22, and she's going to be holding it until it has a 4 in front of it, then I'll reevaluate. JJC