Contrast that with royalty plays or plays with even less strength in the non-tech sectors. They have no particular staying power and comparatively little competitive advantage. When that competitive advantage wears out (and it always happens eventually),valuations revert to the mean.
"When high-tech markets go inside the tornado, they can behave just the opposite of mature markets on Main Street. Specifically, in gorilla-chimp-monkey markets, valuation regresses to the extremes, not the mean... This is the so-called network effects model of increasing returns."
Revised FM, page 315.
Therefore, does this mean that the sequential order of desirable equities is: 1. gorilla....2. godzilla, which is a blend of gorilla/king....and 3. King, in this order?
Should we be looking for Godzillas before Kings?
LindyBill, UF, Mike, Bruce Brown, Downsouth, Tekkie, StockHawke, what do you say?
Apollo |
