THE FRONT OFFICE GORILLA GAME
I'm way behind on my year-end work and don't have the time
to do my usual write-up that features a topic about the
front office software market. Instead, let's immediately
take a close look at some terrific numbers!
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History
History 1999 4th Quarter Annualized
Gorilla Game 308.54% 271.78% 103.59% 140.64%
Nasdaq 125.45% 85.58% 48.18% 66.06%
S&P 500 32.31% 19.51% 14.54% 19.09%
Russell 2000 9.02% 19.61% 18.13% 5.54%
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(Grand pause, allowing readers to recuperate.)
That's HUMOR, Frank! :)
There is simply no way to look at the data from the first
18 months of playing our Game without seeing that it has
been overwhelmingly successful so far. The Game more than
tripled the Naz in its precedent-setting year. It also
more than doubled the Naz in the 4th quarter and since we
began playing on May 25, 1998 (Memorial Day weekend, for
those who wonder what I was doing when everyone was burning
hot dogs on the grill.)
Some might wonder why I make comparisons with the Russell
2000, considering that the two remaining stocks in our Game
have market caps much larger than anything in the Russell
2000. That's true now but when I started playing the game
with four positions, all of them were small-cap stocks. In
that context, the Game's 309% increase since inception
compared with the Russell 2000 increase of only 9% reminds
us that all small-cap stocks and their underlying companies
are far from equal. Gorilla Gaming separates the cream of
the outperforming crop from anything of lesser quality.
For those of you who might argue that we're in a period
when small-cap stocks have been consistently underforming
large-cap stocks, notice that is not true in 1999. Not
including dividends, the Rusell 2000 slightly edged out the
S&P 500. Even so, the Front Office Gorilla game trounced
both indexes by a magnitude of more than 13-to-1 in 1999.
Moving on to the specific stocks:
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5/25/98 5/1/99 Change
% of Buy Buy Average Current from
Stock Port Price Price Cost Price 5/25/98
Remedy 26.1% $17.44 $17.50 $17.46 $47.38 171.67%
Siebel 60.4% $11.50 $19.22 $13.55 $84.00 630.43%
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As a reminder, the Game began with equal portions of
Vantive, Clarify, Siebel and Remedy. There were a couple
changes I won't take the time to explain, but be assured
they were made in accordance with the strict rules of
Gorilla Gaming as best as I could implement them in real
time.
Remedy remains in the Game today as the dominant chimp in
the niche market of internal help desks. Siebel is the
Gorilla or Gorilla candidate, depending on your point of
view, in the overall CRM market.
I am sitting with a cash position of about 13%. I haven't
yet decided whether put the money to work in the two
remaining stocks or to add a new element of marketing
automation software that is getting more and more buzz in
the front office space.
Noting that the game began with $10,000 just 18 months ago,
the final numbers are:
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Stocks $35,356.50
Cash $5,497.58
Total $40,854.08
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The details:
This is NOT a real-money portfolio. The purpose of the
portfolio is to conduct an ongoing real-time test of
concepts expressed in The Gorilla Game as I
understand them. Commissions are based on $8 per trade.
Interest earned on the cash is not accounted for because
doing so would not render meaningfully different results.
The Future:
May Y2k be only half as good to our Game as 1999 was!
Regardless, you can bet your last dollar that I'll be here
reporting the results and why I think they came to be.
FULL DISCLOSURE:
I own a long position in Siebel Systems, one of the two
companies in the above portfolio. I have owned long and/or
short positions in all of the above stocks in the past as
well as other front office software stocks. I reserve the
right to own long and short positions in any front office
software stock in the future. Do your own homework and
please don't make any decisions based on anything you see
coming from my keyboard.
--Mike Buckley |
