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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Mike Buckley who wrote (10257)	11/13/1999 12:29:00 PM
From: Bruce Brown	Read Replies (2) of 54805

Diversity continued.... The December issue of Red Herring has a nice article on page 372 entitled "Are you overweight?". No, it doesn't have a thing to do with diets - although my recent summer sojourn to the US would confirm that many Americans could benefit from reading such an article. ;-) The sub title of the article is Carrying too many high-tech stocks can put your portfolio at tremendous risk. A quick read of the article lists various methods and strategies as well as 'rules of thumb' in determining what percentage of weight one's tech holdings should carry in your total portfolio. There are some that say it should match the S&P's weighting for tech which is 24 percent. Of course, Michael Murphy's formula of having most of your holdings in tech uses the equation of 100 minus your age = what percentage of tech you should hold. I'm 38, so I should have 62 percent in technology. My kids are 4 and 6 - so they have a little higher tech weighting than old Dad who has several growth stocks that fit my criteria such as Amgen, Charles Schwab and Harley Davidson. Don't laugh - the hog heaven is a well managed growth company. Keep in mind that the article is addressed to a wide variety of investors, many that don't have much more than a few minutes a year to make their investment decisions let alone the kind of time and effort those of us on boards like the G&K have encountered. However, I wonder if the freelance writer K. Anne Reinhard understood that the normal audience that reads Red Herring is not the type to have a mere 25 percent tech weighting in their portfolios. For those that are not geared to read the magazine and just picked it up by 'accident', I seriously doubt it if they ever made it all the way to page 372 where the article begins. No matter which formula an individual investor uses, the Gorilla Game can be played well by only having a 25 percent weighting in technology, a 30 percent as some Wall Street analysts suggest, 100 - your age = weighting or whatever one's final weighting ends up being. We certainly know from the manual and the fine tuning methods practiced here that risk aversion, as UF points out, is key. The tech weighting portion that each individual investor is comfortable having will blossom well under the G&K methods we discuss. We all come to the table with different goals and strategies. Some of us believe in a little diversification while others don't. That's okay. I just wanted to make that distinction for any lurkers or new visitors to this thread. BB

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