PCMech Forums - View Single Post - Mutual funds suck, but a good stock pick is...

troysvihl · 12-04-2000, 08:42 AM

>>Index funds are mutual funds as well...they are just not managed by an invidual or team of investment professionals.
I have to agree that in the last several years, index funds have outperformed managed funds.<<

That's the great thing about index funds. No worthless managers to skim off your profit. I subscribe heavily to the efficient market theory that states all relevant information has already been discounted into the commoditie's price. Therefore, there is no point in paying some yahoo to do research that literally tens of thousands of other analysts have already done. Anything worth gleaning from that information has already been incorporated into the price.

>>BTW, Gateway on the surface appears to be a good buy but on what do you base your statement that they will turn it around in 2-4 Q's? I remember when Compaq plummeted and everyone said that they were a good buy then, since then they have shown no real upward momentum, they have hovered around the 25-30 range.<<

Well, I think they are the best mass computer producer on the market right now. As long as I can remember, they've always outpriced any other computer manufacturere and they always get the new technology into their computers before any of the other manufacturers.

Their P/E ratio is real good right now, and the big hit they took on earnings this quarter is due to a loss in tech stock investment. I don't think the tech market will decline much further than it already has, so I think Gateway's losses will slow from their investment capital.

Of course all this is already discounted into their stock prices. In fact I doubt there is a single piece of information that I could get my hands on that would give me any advantage in picking this stock. There are thousands of analysts whose only job it is, is to watch Gateway stock for years and analyse everything relevant in excruitiating detail.

So take my advice with whatever weight you want. It's worth what you paid for.

12-04-2000, 08:42 AM	#13
troysvihl Member (11 bit) Join Date: Nov 1999 Posts: 1,606	>>Index funds are mutual funds as well...they are just not managed by an invidual or team of investment professionals. I have to agree that in the last several years, index funds have outperformed managed funds.<< That's the great thing about index funds. No worthless managers to skim off your profit. I subscribe heavily to the efficient market theory that states all relevant information has already been discounted into the commoditie's price. Therefore, there is no point in paying some yahoo to do research that literally tens of thousands of other analysts have already done. Anything worth gleaning from that information has already been incorporated into the price. >>BTW, Gateway on the surface appears to be a good buy but on what do you base your statement that they will turn it around in 2-4 Q's? I remember when Compaq plummeted and everyone said that they were a good buy then, since then they have shown no real upward momentum, they have hovered around the 25-30 range.<< Well, I think they are the best mass computer producer on the market right now. As long as I can remember, they've always outpriced any other computer manufacturere and they always get the new technology into their computers before any of the other manufacturers. Their P/E ratio is real good right now, and the big hit they took on earnings this quarter is due to a loss in tech stock investment. I don't think the tech market will decline much further than it already has, so I think Gateway's losses will slow from their investment capital. Of course all this is already discounted into their stock prices. In fact I doubt there is a single piece of information that I could get my hands on that would give me any advantage in picking this stock. There are thousands of analysts whose only job it is, is to watch Gateway stock for years and analyse everything relevant in excruitiating detail. So take my advice with whatever weight you want. It's worth what you paid for.