Gorilla and King Portfolio Candidates Message Board

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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: 100cfm who wrote (12150)	12/6/1999 9:13:00 AM
From: Uncle Frank	Read Replies (1) of 54805

>> in any industry a company will move into any area where increased margins are percieved. the difference is whether those margins are open to attack or not. Several decades ago the Boston Consultant Group postulated the Umbrella Theory, which advised components manufacturers to voluntarily reduce margins to reasonable levels, even on proprietary devices, to avoid providing a hospitable environment for potential competitors. BCG also created the famous Learning Curve Theory, which states that component manufacturers will realized a fixed percentage cost reduction every time their cumulative unit volume doubled. Both theories were incorporated into the culture of the semiconductor industry, and imo have contributed to the lemming-like behavior of that sector. >> a company with only a kings power would most likely keep their margins reasonable as to not invite attack. a gorilla has no such concern and charges whatever the market will bear. Incredible companies such as emc have provided fabulous returns to their investors, despite having "only a kings power" <lol>. I can't fathom the obsession the jdsu gang has for redefining the GG to include jdsu as a Gorilla. It won't make your portfolio any larger, CenturyMan. If it's any consolation, even Q100 Club members are turning green with envy over your returns. >> A king with the power to charge full tariffs entering into a tornado market for their product will most likely develop into a gorilla. I've read the GG very carefully three or four times but have never run across that concept. Can you cite a reference, or are you defining a new process for creating Gorillas? Show me the ipr and I'll be the first to yell, PONGID ALERT. Until then, resign yourself to owning a "mere King", and console yourself with a +629.4% ytd return. Such a problem <vbg>. uf

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