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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: TigerPaw who wrote (13366)12/28/1999 11:12:00 AM
From: Seeker of Truth  Read Replies (2) of 54805
 
Some companies are doing well because they are executing very well; the management is superb. Examples I can think of are Vitesse Semiconductor and PMCS. The problem is in my opinion that the business is not as good as the management. Both the gorilla philosophers and Warren Buffet say that ideally they are looking for a business so indispensable that even lousy management can make money with it. Buffet talks about a moat. We talk here about an architecture that is unique and adopted by almost everyone, for convenience if not for its excellence in other ways. It then grows many developers, add-ons etc. It's sort of a hub. It is the center of some discontinuous change. So your stock may double in a short time but it could still only be a prince.
An advantage of gorilla investing is that it is way safer than other styles. In the short term you surely can make as much or more money in some higher risk gamble, which often arises from the fact that the company was first into a new area where there is no proprietary architecture but the guy in first makes lots of money until the competition catches up. But you can sleep better at night owning gorillas. Does this address your problem sufficiently?
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