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URL:  https://boards.fool.com/riskreward-of-stocks-to-rule-the-world-12287461.aspx

Subject:  Risk/Reward of Stocks to Rule the World Date:  3/27/2000  5:58 PM
Author:  neckimran Number:  1814 of 8810

It's been very interesting reading the list of 10 stocks to rule the world. The original poster excluded some stocks (eg. CSCO, ORCL) because they were too mature and hence offered less appreciation potential and some others (eg. LHSP, BLDP) because they were too immature.

I happen to love many of the 10 stocks on the list but I also love some of the above-mentioned stocks and I thought it would be valuable to compare the risk/reward potential of these 10 stocks with some of the mature and immature ones as well, over the next five or ten years.

It would not be unreasonable to assume that one could have a portfolio which included a few stocks from each category.

Stocks to Continue to Rule the World

Intel
Microsoft
Cisco
Nokia
Oracle
EMC
Yahoo
Sun
Ericsson

Regardless of whether they are a Gorilla, a Godzilla, a King etc, these stocks are all 800lb heavyweights which dominate their industry and have many defensible advantages because of which they command their huge market caps. So the "risk" I am getting at is the risk of their losing that dominant position.

Stocks Not Quite Ready to Rule the World

LHSP
Ballard Power
Celera (It's on the Top 10 list, but I'd say that it is about at the same stage in its evolution as LHSP or BLDP )
HGSI

Top 10 Stocks

Cree
Broadcom
JDSU
Network Appliance
Echelon
Redback
Gemstar
Siebel
Qualcomm

Would you really buy only the top 10 stocks? For instance, JDSU's market cap is almost 100B. In the same ballpark as that of EMC and Yahoo. But does Yahoo offer the potential of greater reward at the same risk? Does EMC offer equal reward at less risk?

So how about grouping these stocks based on their relative risk and reward levels. I am arbitrarily assigning the words "High", "Medium" and "Low" but the idea simply is that all the "High" are roughly comparable and higher than the "Mediums".

Low Risk = INTC, MSFT, CSCO, NOK, EMC, SUNW, ERICY
Medium Risk = ORCL, YHOO, JDSU, BRCM, NTAP, SEBL, QCOM, GMST
High Risk = CREE, ELON, RBAK
Very High Risk = CRA, LHSP, BLDP, HGSI

Low Return = INTC, MSFT, SUNW, CSCO, NOK, ERICY, ORCL
Medium Return = YHOO, EMC, JDSU, BRCM, QCOM, NTAP, SEBL
High Return = GMST, RBAK
Very High Return = CREE, ELON, CRA, LHSP, BLDP, HGSI

This is simply the way I've broken it down. I'd like to hear people's opinions on what risks and rewards they would assign to each stock. And then based on that assignment, how would you compare stocks from the Top 10 list with those in the Mature/Immature lists?

Thanks!
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