From: Michael Lorrey (mike@datamann.com)
Date: Thu Feb 22 2001 - 17:58:22 MST
James Rogers wrote:
>
> At 02:08 PM 2/22/2001 -0500, Michael Lorrey wrote:
> >I don't know of any such funds, but I wouldn't mind starting one:
> >
> >prospective stocks:
> >GE
> >Westinghouse
> >Ruger
> >Zyvex
> >Orbital Sciences
> >Kistler Aerospace
> >SeaLaunch
> >Boeing
> >Lockheed
>
> The object of a mutual fund is making money, not the unqualified investment
> in companies that make things you like. Buying publicly traded stock on
> the market doesn't benefit the company (ignoring minor secondary effects),
> so you aren't doing them any favors.
True, but if one has to invest, you can't beat the advice of Warren
Buffet, who does say to invest in companies that make things you use,
and he sure hasn't done too badly on that strategy.
>
> A better strategy is to invest in good companies that don't do anything you
> don't like (say, donating money to HCI, for example). About half the
> companies on your list are marginal or speculative investments that would
> probably do relatively poorly as a group. For example, gun companies are
> generally a poor investment -- I wouldn't qualify their outlook as
> particularly high growth.
Gun companies are *currently* a poor investment, but are actually a very
good value due to current public hysteria and anti-gun propagandizing
(though there is the effect of sales going up every time some nut wants
to pass another ban...). At one point in the 80's, Texaco was a very
poor investment due to a $12 billion judgement against them to be paid
to Pennzoil. A year later the judgement was settled for $2 billion and I
tripled my money. Based on this, if you think that tort reform of one
kind or another is likely in the next few years, invest in gun, tobacco,
civil aircraft, chemical, and step-ladder companies.
>
> I think the point of this exercise is to use our collective foresight to
> predict what companies are likely to be the leaders in technology fields
> that will become huge (and profitable) in the future, gaining growth via
> our presumed ability to accurately identify important ground floor
> technology ventures so that we can profit from explosive growth. Balance
> that with a few smart blue chips like IBM and Merck, and you have a good
> basis for a mutual fund.
I thought I was. Given increasing energy demand due to the internet (if
13% increase in power demand in California is any indication), stocks
like GE and Westinghouse should be nice secure growing stocks. Given
increased defense spending under Bush, Boeing and Lockheed stand to gain
the most. All four are rather secure stocks.
SeaLaunch cuts launch costs so should pick up market share as it gets
off the ground. Whether the consortium puts its stock on the market is
another question. Orbital and Kistler stand to do well as space is
privatized more and launchers come on line.
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