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(October 18, 2000) WOW, what a decline in the NASDAQ. Now, more than ever, is a time to consider buying stocks.
I'm not really sure what to tell you, but a low market means bargins, especially long-term thinking.
Here are some of the stocks that I watch. I'm only sharing some observations I've made. I'm not making any recommendations. I am simply bringing to your attention some companies that you may want to watch. For some of the stocks, I will explain why I watch them. I may or may not own them. I will rarely explain the financials on these companies, but rather focus on what the company does and how well the company should perform based on their business. Basically, if we were talking about stocks over some beer, this is what I would say.
My stock investing strategy is long term for 80% of my holdings. I speculate with the rest. I don't recommend this, but it's for my entertainment purposes. Anything I write about here will be from the long-term point of view.
Note to those not currently investing in individual stocks
EXTENDED DESCRIPTIONS ON SELECTED STOCKS:
General Electric (Nasdaq:GE) - Jan 15 2001 price=$45.69, PE=37.45
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Anchor man. If a friend was dying to buy their first stock and asked me for advise, I'd tell him to buy GE. This company is like a mutual fund in itself with it's vastly diverse operations.
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Yahoo! (Nasdaq:YHOO) - Jan 15 2001 price=$26.56, PE=55.34
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Do you Yahoo!? I sure do, this web service rocks a million! I use it for my email, my website, my online photo album, snowfall reports and alerts to my pager, stock quotes, alerts, reports, and research, news, movie listings, tv listings, notepads, bookmarks, weather, yaddi, yadii, yadii. They are user friendly, clever, and powerful. As a user, I want this stock, although I do not own it yet. So, fortunately, for a potential buyer, I'm glad it is coming back to earth. Please suggest another service like this so I don't get set in my ways. (this is not a figure of speech, please take me up on this).
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Starbucks (Nasdaq:SBUX) - Jan 15 2001 price=$44.75, PE=91.33
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I keep saying I want this stock, but the PE is too high, but Starbucks is running rampid in a neighborhood near you. It's too hot, so tempting to jump in. Their products are yummy, and expensive, and their outsourcing business model is economical. Their products are so good, but take the common person a significant amount of time and a messy kitchen to make at home, so people are willing to pay the price. I estimate the actual product costing less than half of the retail cost. I know this because I figured out how to make the Frappachinos myself. (I sometimes make them better, because occasionally, a Starbucks worker will add too much caramel). They recently signed a deal with Microsoft to provide some sort of interent service. It's about time, I wondered when the internet would become available in coffeeshops.
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PALM, Inc. & Handspring (Nasdaq:PALM & HAND) - Jan 15 2001 PALMprice=$27.56, PE=229.69 HANDprice=$47.62, PE=No Earnings
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I'd like to think PALM will be the leader in the future wireless phenomena, but watch out for Handspring. Probably, both of these wireless device leaders will lead the market. I'll let you decide, but cash in on the future of wireless!
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Security Dynamics (Nasdaq:RSAS) - Jan 15 2001 price=$55, PE=16.82
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I still don't know why RSAS hasn't flown with the internet leaders. The good news is that is hasn't crashed with them. A leader in the internet security arena, this company has great financial numbers. When I originally researched them over a year ago, they were debt free and had large amounts of cash, enough to buy a competitor. Currently, RSAS is a $2B company with $1B in cash. Entrust technologies, a sample competitor, is a $1B cap company. They still have a low PE, and security on the internet will always be a market. What's up RSAS? I keep buying thinking this is a gift, but there is no action yet. Coming out this week, watch 'Antitrust', a movie featuring Security Dynamic's SecureID, an encryption scheme for accessing secure networks. By the way, I also use their SecureID product at work. Many web browsers and websites also use Security Dynamics for their encryted pages. As a buzzword in the industry, their products work flawlessly and I've read technical message boards stating the same.
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Owens Corning (Nasdaq:OWC) - Jan 15 2001 price=$2, PE=No Earnings
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OWC is in creditor protection status. I suppose this isn't actually called bankrupcy, but if you like to dabble in companies which you think will pull themselves out of the deepest of holes, try this one. It already more than doubled YTD.
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Hott Topic (Nasdaq:HOTT) - Jan 15 2001 price=$22, PE=22
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HOTT is up over 500% for me since I bought it two years ago. Hott Topic, a teenage
freak store, sells the latest crazy stuff to teenagers. My philosophy of teenagers is
that they do not know what the economy is compared to their desires and needs for their
'stuff', so as long as Hott Topic has what the teenagers want, HOTT will continue to
soar. The retail store always seems busy when I visit the mall. Before and since I bought it, I have never seen any
negative articles about HOTT. All reports and stories have been good or excellent.
HOTT is at a record high this past Friday. It periodically comes quickly comes down
20-40%, but has always recovered. I recommend waiting until this happens before purchasing HOTT.
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Xilinx (Nasdaq:XLNX) - Sept 8 2000 price=$85, PE=43
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A volitile technology stock in the semiconductor industry. This company currently produces the leading FPGA product, according to two of my very reliable electrical engineering sources. I too, have approving experience with Xilinx's previous family of products, from when Lucent was a threat to being an FPGA leader. Not only does Xilinx currently 'blow-away' Lucent, Altera, and other competitors in the FPGA industry with their latest family of products, but Xilinx is a 'pure-play', meaning, if this one product does well, the company should show this in their finances. In contrast, if Lucent's FPGA product does well, the fiscal results for this product may be buried by the performance of all other types products provided by Lucent. Warning: this is a volitile stock in the semiconductor category, and must be watched frequently. This company could slip out of the lead each time the next generation of FPGAs arrives from all the competition.
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Ballard Power (Nasdaq:BLDP) - Sept 12 2000 price=$116, PE=no earnings
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A risky pick in the area of fuel cells. Fuel cells have been recently hyped as the save our earth energy source. Ballard Power is specifically focused on automotive applications. New technology? Well, yes and no. The technology is tried and true. It works. This technology has been used in outer space for decades. Recent developments by fuel cell manufacturers have made them much more efficient. Fuel cells are becoming more likely affordable to consumers instead of just government space programs.
The risk is not in the technology. The risk is in the politics and money issues that are overwhelming the actual product. Will these fuel cells power automobiles as economically as our current means of transportation? Will the automobile manufacturers and services survive on more maintainance-free engines without capitalizing on profits from automobile maintainance? Will the oil monsters have a dirty hand in the progress of the fuel-cell? Oil is one of the single most important controllers of the world. More specifically, energy is perhaps the single most powerful product of the world. he latest news about fuel cells looks good up front, but I bet there is a lot going on that we don't see. I bet there are BIG BIG things going on behind the press. I'll leave it up to you to gamble on the outcome.
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H-Power (Nasdaq:HPOW) - Sept 12 2000 price=$27.62, PE=no earnings
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A less risky pick in the area of fuel cells, compared to Ballard Power. H-Power is specifically focused on diverse consumer applications such as batteries for portable electronics, power for construction sites, and other non-automotive applications. Although H-power supplied fuel cells for a fuel cell powered automobile in a joint project with the New Jersey Department of Transportation and other organizations, H-Power is remaining flexible to avoid the big business of automobiles and trying to sprinkle themselves throughout other alternate energy applications. This is per a conversation I had at the New York car show at the Javits Center in Spring 2000 with the orchestrating engineer for the fuel cell projects in New Jersey.
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