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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (264)	2/21/1999 3:54:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

[SAP is] a great company, that seems to be going nowhere in its stock price right now. LindyBill's issue brings up the point that the authors refuse to discuss valuation in any quantitaive terms. As much as I like long-term investing that reduces the risk of buying at a high price, I prefer long-term investing that increases potential reward of buying at a low price. Since the authors offer no help with quantitative valuation, I've come to the conclusion that it's best to buy G&Ks and potential G&Ks on significant dips. That might mean we miss out on some potential spikes in stock prices but sometimes there's nothing quite so good as capital preservation. As an example, I've been fortunate to have done very well with my Siebel investment made in March, 1998, at what I thought was an astronomic valuation at the time. But I would have done even better if I had waited until the October dip to buy. I've been keeping track of my gorilla wannabes in the front office software space (intended to be both short- and long-term depending on the situation). With the exception of my Siebel investment, my other trades were based on what I perceived to be quantitative undervaluation. Even though one of them was a disaster, my annualized return beginning in June, 1997, is 104% compared to the S&P 500 which is up 22% annualized since then. (If you think I'm a genius, don't ask how the rest of my portfolio is doing recently because it puts me squarely in the dunce category.) --Mike Buckley