Len, We agree. IBM is way to the right on the growth chart, where it's leveled off after the tornado. And we're looking to ride the tornado on this thread. I'd say Intel is getting to the same place as IBM, btw. EPS growing somewhat faster than S&P 500 average, but past the hypergrowth stage.
If you want to diversify, say have no more than 20% of your portfolio in any one stock, and stay in gorillas--not kings--then there aren't enough companies to fill out your portfolio. You either have to go into Kings or into older gorillas.
I still have trouble putting all my eggs in such a limited basket as confirmed gorillas in the tornado. I guess that's my 1970's-style MBA training, when they were just developing portfolio theory.
My risk appetite severely constrains me. I am uncomfortable having too much of my money in stocks that are growing like mad, but aren't making any money. For me, that limits my ability to hold a lot of the Kings that are popular on this thread. Moore makes a point in all three books I think that it's hard to make the transition from a company growing like mad while losing money, to one still growing but making money. That is one thing that is so attractive--and rare--about both QCOM and GMST. They have gotten to where they are now while consistently making money.
Oh, Moore mentions one IBM product as a gorilla--Lotus Notes. Of course, he mentions it in Tornado, which is 5 years old. Any idea how Notes stands in this sector, today? (I suspect it dominates the enterprise market, but is weaker once you move into second-tier sized companies).
Best,
JS |
