Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 36
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!
Print the post Back To Top
No. of Recommendations: 2
Neckimran, thank you very much for your analysis and breakdown. After reading your post I would have to agree with your conclusion on Celera. While I had removed LHSP and BLDP from my list due to the uncertainty of their markets, I had neglected to review CRA using this same criteria. The genomics sector may be more established than the fuel cell or voice recognition sectors but there are still considerable uncertainties pertaining to Celera's business model. I'm a believer in the future of genomics and was looking for the company that provided the greatest chance of success. Genomics will be huge but picking a drug development company today, that will dominate the field in ten years is virtually impossible. Celera doesn't care who wins the battles, it provides the ammunition to both sides. I believe that the company could have an incredible future ahead of it but at this early stage it's just to risky for the top ten list.

After giving it some thought I feel that it might be a good idea to add a second list of the "Stocks That COULD Rule The World". The criteria for this list would be similar to the "Ten stocks to Rule the World" except that we would include those companies who dominated markets where there remained questions about widespread adoption. Ballard Power and the Fuel cell market would be a perfect example of the criteria: A company that dominates an emerging market with enormous potential but also a great deal of uncertainty related to whether this niche will ever grow into a mass market phenomenon.

Let's not forget that simply because a technology is fundamentally better, does not guarantee that it will gain mass market acceptance. I'm sure there's more than a few of you with that wonder of technology known as the Laser Disk Player collecting dust in the back of your closet.

I will begin this list by placing the three obvious names on it:

Ten Stocks That COULD Rule the World:


LERNOUT & HAUSPIE SPEECH (LHSP)
BALLARD POWER (BLDP)
CELERA (CRA)



Please feel free to nominate companies you feel fit the criteria.


Finally, now that CRA has been removed from the Ten Stocks to Rule The World portfolio, there is an empty place that needs to be filled. Anyone have any idea's, some that I would consider are ITWO, ARMHY, BRCD, ARBA.
Print the post Back To Top
No. of Recommendations: 4
Don't know how one would pick from ITWO and ARBA. I've got them in a GG B2B basket along with CommerceOne, and Perigrine (and Oracle of course).

Along those lines though, I'd really like to see the board define specific baskets where the games are shaping up. Sure we talk about some favs all the time but, well, here's an example: I've bought a number of the NextGen Network companies that we have talked about here but I am having trouble understanding how they break into natural groups of combatants like who are RedBack's, Juniper's, Sycamore's, and Brocade's natural enemies? Understanding that, after all, is at the very heart of the Gorilla Game and I'm not feeling very confident about my capabilities yet in this NextGen Battlefield (still need to do more homework, eh).

So, I guess my first paragraph implies that putting, ITWO or ARBA on the List of Ten seems a little premature to me, like we've already picked the winner - have we? I'd like to see "Six Baskets to Rule the World!"

-Ken (a faithful lurker...)
Print the post Back To Top
No. of Recommendations: 11
What great threads on this board!! The level of discussion on this board has been superb lately - what a treat to spend an hour reading posts of this calibre.

Two small comments - I am not entirely sure why Nortel is not discussed more often. I only own a little bit of it, and the more I learn about it, the more I wish I had bought more long ago. It has been dismissed by some as being too mature, but I don't think this is true, despite the fact its Market Cap is pushing $200B - remember, the stock has appreciated 500% in 12 months, and revenues continue to climb (1996 - 12,847,000, 1997 - 15,449,000(21% rise), - 1998 - 17,575,000 (14%) - 1999 - est 22,217,000 (26%). The company also seems to have been quite successful at blurring its boundaries, partly through acquisition, and partly through internal development. It is getting harder to define what parts of the Telecosm Nortel is NOT involved in as time goes by. Basically, I feel guilty for not latching on to it sooner and more heavily - comments?

Secondly, a small personal experience comment regarding speech recognition. True, this technology has improved significantly, and is looking better all the time. Still, in my business, we dictate approximately 1/3 million reports a year, with fairly technical terminology, and every year many companies tell us that SR is now "Ready for Prime Time" - well, it is getting better, but it is still kind of like the dog that can sing - the remarkable thing is not the quality of the song, it is that the dog can sing at all. 95% accuracy rates are actually TERRIBLE - that is an error in almost every sentence. Experienced stenographers in our hospital might make one mistake every 20 to 50 pages or less - quite an astonishing thing, really - LHSP, IBM, Dragon and many other products are still no where near the accuracy we need in our field.

All of the above gives me pause to reflect on the enthusiasm shown for SR companies. Certainly there is much to like about LHSP, but the field, to my view, is a LONG way from Tornado status. I think it has to happen one day, and they are a good bet, but at the moment, speech recognition is a long way from the penetration status of what our old antique 8 track tapes used to enjoy. (I never did buy one of those infernal things)

Just my $.02 worth (or, US$ 0.013614704)
John
Print the post Back To Top
No. of Recommendations: 0


Gorilla strategy does not apply to biotechs, yet it has been extrapolated to this field.

In the biotech field I believe that maxygen might be one of those very high returns, very high risk, rule the world category. The scope of products is wider.

Anybody done their DD?

Agustin
(no position on MAXY)
Print the post Back To Top
No. of Recommendations: 0
sorry - on the last post I neglected to say the NT revenue figures are in 000's of $US. ie 22 Billion expected 1999.
Print the post Back To Top
No. of Recommendations: 0
>All of the above gives me pause to reflect on the enthusiasm shown for SR companies. Certainly there is much to like about LHSP, but the field, to my view, is a LONG way from Tornado status. I think it has to happen one day, and they are a good bet, but at the moment, speech recognition is a long way from the penetration status of what our old antique 8 track tapes used to enjoy. (I never did buy one of those infernal things)<

you are very correct regarding poor quality in speech recognition software; however, this is only at the end-user commercial level (shrink wrapped store-bought software).
if ever you've called directory assistance or another service in which you speak sentences over the phone to a computer which interprets them, you will find that these systems are superb!
in fact, the speech recognition system designed by the government, more specifically, the department of defense and the NSA, monitors all phone conversations in the United States (and outside too :) ) and is so accurate that the computers can search through the conversations for key words or phrases. these systems are remarkable because with no problem, they can discern what people are saying even when they have different accents, speed, intonations, etc. and without any training, obviously, that is sometimes required by the shrink-wrapped software. i assume that these speech recognition programs also understand multiple languages. the software used in these circumstances have incredible accuracy - well above 99%.
so, i'm not familiar with what the focuse of LHSP is, but i know that speech recognition is already light years ahead of what is available for purchase as software products at the computer stores.

because of the incredibly long delays involved with getting "bleeding-edge" technology to consumers, we may not see this kind of speech recognition for 5 or 10 years.

-Cybernaut
Print the post Back To Top
No. of Recommendations: 4
FWIW, I'd like to recommend using the Workshop Model Current Rankings to assist in determining risk and reward.

IMO, RS is a momentum-based screen, holding high-risk stocks (I classify the S&P as medium-risk). Key100 is a large-cap screen, for longer-term growth, but with a lower CAGR than RS. If a stock appears on both RS and Key100, you may have a long-term winner, but watch out for that volatility (like that's news to you). See the Workshop FAQ for more information.

Relative Strength-26 week
1 BEA Systems BEAS
2 SDL Inc. SDLI
3 Network Appliance NTAP
4 JDS Uniphase JDSU
5 PMC-Sierra PMCS
6 Siebel Systems SEBL
7 Oracle Corp. ORCL
8 Titan Corp TTN
9 QLogic Corp. QLGC
10 Analog Devices ADI

Keystone100
1 BEA Systems BEAS
2 SDL Inc. SDLI
3 Network Appliance NTAP
4 JDS Uniphase JDSU
5 PMC-Sierra PMCS
6 Siebel Systems SEBL
7 Oracle Corp. ORCL
8 Ciena Corp. CIEN
9 QLogic Corp. QLGC
10 Analog Devices ADI

Workshop Current Rankings:
http://www.fool.com/Workshop/WorkshopRankings.htm

Workshop FAQ:
http://boards.fool.com/Message.asp?id=1030063000770000


Washu! ^O^


Print the post Back To Top
No. of Recommendations: 0
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.

*****

Sorry! Forgot to mention that this particular list overlaps the Workshop Model Spark screen. MSFT, NOK, SUNW, but not Ericsson have appeared on Spark in past months. Perhaps you can use Spark to help you classify the heavyweights. You get to decide if this is coincidence or something else. (:

Spark
1 Cisco Systems CSCO
2 Oracle Corp. ORCL
3 America Online AOL
4 EMC Corp. EMC
5 Motorola Inc. MOT
6 Yahoo! Inc. YHOO
7 Qualcomm Inc. QCOM
8 JDS Uniphase JDSU
9 Analog Devices ADI
10 Network Appliance NTAP


Washu! ^O^
Print the post Back To Top
No. of Recommendations: 1
i would like to put my two cents worth in also. cyber is right when s/he says that dictation is a small part of lhsp's overall scope. there are many amny other facets to lhsp(instantaneous translations, text-to-speech for example) what the consumer sees on the shelf is only the tip of the iceberg(which is less the number 2 comapny thanks to the acquisition this morning).

concerning the time frame...
th thing to remember is the exponential growth of computers, even if you understand it thoroughly, it is still hard to grasp. example, if you had a single grain of rice on a chess board, and doubled it every square until the 64th, on that final square you would need a rice patty twice the surface area of the earth in order to fill it...
what does all of this mubo-jumbo mean? i think that the train is picking up speed, and is coming sooner than we realize.
Print the post Back To Top
No. of Recommendations: 3
Ten Stocks That COULD Rule the World:...

...Please feel free to nominate companies you feel fit the criteria...


ELON, ARMHY

Maria


Print the post Back To Top
No. of Recommendations: 0
...concerning the time frame... the thing to remember is the exponential growth of computers, even if you understand it thoroughly, it is still hard to grasp. example, if you had a single grain of rice on a chess board, and doubled it every square until the 64th, on that final square you would need a rice patty twice the surface area of the earth in order to fill it...

You are correct. And you would even realize what was happening until you were more than halfway through the board. Technological progress generally surprises us with the speed of adoption.

Maria
Print the post Back To Top