I like Lindy's ideas about reassessing TFM, and in particular, targeting Kings for potential gains.
It would seem there are many more kings than gorillas. If we as a group could identify fast-rising kings in the making, and also determine a reasonably safe entry point, and reasonably safe exit point, our profits here could be enormous. Knowing when to get in Dell, and when to get out, would be stupendous.
I haven't done all of DD, but I am thinking of Exodus here. EXDS is a web-hosting player, that provides internet web site services, and plays on 2 themes: 1) corporate outsourcing of internet services, ie to Exodus, and 2) all enterprises need websites, with rapidly accelerating E-commerce. As far as I can tell, Exds is a King or a Prince with attitude. It probably has low barriers to entry, and maybe low switching costs. ON the other hand, it is the biggest in its field, has first mover advantages, and its field is massively growing. Apparently, Exds has an approximate run rate of qtr to qtr revenue growth of ~ 40%.
So EXDS is not a gorilla, and not as safe from proprietary control, or a lock on the market viewpoint. OTOH, it appears to be on the upslope of a vastly growing Ecommerce/Internet game; its market is growing so fast, it appears to be able to accommodate all new entry competitors for the time being. So at first glance, investing in a Royalty company like EXDS "seems safe".
I second Lindy's challenge to re-think the rules a little bit, and also to place additional focus on Kings.
Apollo |
