Sir Dancelot,
<<StockHawk: this post is not at you, but at the concept, that shows up a lot on this thread, of comparing returns between Gorillas and non-Gorillas here. If I had other stocks than Q, JDSU would be one of them, and Gemstar would be another.
However, I would regard JDSU as riskier than Q, because it is not a Gorilla. I expect an investment that is higher risk to return more, so it is no big deal to me that JDSU is doing better.
My two best stocks last year were AOL and DELL, a King and a Prince. I held my breath while I held them, AOL especially, and I ran like a rabbit at the first sign of trouble. >>
This is the part I have been trying to sort out the last few weeks. While what you say makes perfect sense, what has thrown me of course is the line from the RFM "The amount of wealth created by an enabling-technology tornado that creates a true gorilla dwarfs any other investment returns on the planet".
This had me thinking that the biggest annual return should be from a gorilla. But JDSU and a few others that have done extremely well are not gorillas (or at least not yet). I compare other stocks to Q without adjusting for risk.
I can tell I'm going to have to read the book a second time. The Gorilla Game is not about making the most amount of money (from page 16: "There are huge windfalls in high tech that will never come your way if you play the gorilla game"). Instead, "In the final analysis, we think the gorilla game is particularly appropriate approach to investing for private investors who are risk averse but who need to build wealth faster or in greater amounts than conventional alternatives support" (also p.16).
My mindset at this point is that I want to reduce the overall risk of my portfolio in a way that minimizes the drag on annual return that safety would normally exact. Right now I like having a few high octane stocks in the portfolio. What I suspect is that the closer I approach my FLI, the fewer royalties and shiny pebbles I will want. The difference between me and you full GGers is our closeness to the FL.
Greg |
