Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Uncle Frank who wrote (1821)	5/9/1999 10:53:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Frank, As a valuation junkie, I really appreciate that you forwarded Chuzzlewit's valuations. There are no perfect valuation tools and my view is that many valuations should be used to arrive at a range of fair values. Another approach is to change the parameters within a particular valuation tool to arrive at a range of fair values. It's interesting that Gorilla Game not only makes no attempt at quantitative valuation and that Geof Moore insists the adoption of the product is the best possible valuation, though not quantitative, of a gorilla. It's especially interesting to see Chuzzlewit's valuations at the same time we're discussing the discrepancy between an index's performance and the performance of all the stocks within that index. He is not alone in comparing a stock's premium to growth with an index's premium to growth. People like me who question the index in the first place find that approach to be as laden with problems as all the other valuation tools. Another problem I have with his approach is the use of the five-year estimates. It's so difficult to accurately predict earnings five years out. Also, I've seen so many instances in which the five-year estimates contradict short-term estimates that it would be virtually impossible for both to come to fruition. Having said all that, no valuation metric is perfect and Chuzzlewit's CNPEG and CNPEG2 could certainly be added to the mix of valuations that are used. It's really important that we understand the weak points of any valuation tool (and all tools have their weak points) so we appreciate the possibility of a valuation tool to misguide us. Like I said, I'm a valuation junkie. Sorry you had to put with me. :) --Mike Buckley