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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: 100cfm who wrote (12971)	12/19/1999 11:12:00 AM
From: mauser96	Read Replies (1) of 54805

Much as I value it, Gorilla Game is just a book, written by human beings that like the rest of us are not perfect. Certainly we should not be afraid to question some of the conclusions. Another reason to question LU gorilla status is it's very un-gorilla like difference between cost of capital and return on capital (Stern Stewart methodology) In the case of LU the spread is +5.9%. Similar figures for MSFT, INTC,and CSCO are +43.6%,+22.5%, +25.1%. What this means is that LU is finding trouble returning more on capital than companies like Allstate or Kimberly -Clark. This demonstrates their lack of true gorilla power. Source Fortune Magazine 11/22/99 issue. In many businesses customers both support and plot against suppliers, depending on the circumstances. This is not unlike other human behavior where a group will in-fight amongst themselves but unite against outsiders. Caveat- I own some NT, a competitor to LU, but I don't think it's a gorilla either. Both are crown princes probably, and while one may be ahead of the other in any particular field, they will share the telecom supplier market.

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