Malcolm thx for your post. First it is quite timely coincidence you replied to me; I just was reading your recent posts re SEBL. Application software is where I work eat and breathe, and there are plenty of opportunities in app s/w gorillas and the 2nd-best app s/w play, healthy, happy app s/w chimps. Look forward to discussing these with you & anyone.
I am inclined to agree with you re just buying QCOM. Maybe a "ready, fire, aim" strategy re when to buy is better.
I have no doubt your friends you urged to buy QCOM and other skeptics have perhaps a higher IQ than ours! This GG stuff ain't rocket science, as authors cheerfully point out early on in "TFM" (why the "F", BTW? You'd think millionaires would be more cheerful! :-)
But such investors have simply not been exposed to GG and instead hear analysts warning of impending doom. One example from tonight's NBR: an analyst (didn't get his name) was warning/complaining that some stocks are being valued on a multiple of 2003 or 2005 expected earnings. My newly acquired GG-based response is "No DUH!" If it is a foregone conclusion that the company's business model is guaranteed to rake in the dough in 2003 and 2005 and the fact that these earnings (actually revenues) WILL happen (always underestimated for a gorilla as UF notes early & often), why NOT include that in the stock's valuation? The chapter 4 graphs were VERY helpful in explaining this.
There are a LOT of "high IQ" investors who think they are investing with a safe reasonable strategy; often that includes "value" investing. Suppose your two nice friends treated Joe "Value" Bloggs to Xmas dinner last year. He recommended Fruit of the Loom as a "value" stock. We all know what FTL does, it has been beaten down (still double digits at that time AFAIK), so heck, it's a "value" stock! Your friends might well have bought it, as some "value" pickers had recommended. Well today Fruit of the Loom is trading at 1 & change, filing for ch.11. Nuff said.
What went wrong for what on the face of it seemed a sensible investment over this "dangerous techno stuff" is that it is much easier to run with a gorilla with "unfair" extremely long-lived advantages than it is to identify which "value" stocks are just "having a cold" and which ones are slowly but surely dying. I am venting here because I have pursued a "value" strategy up to this point with predictable results. My only "growth" picks, EMC and ADI comprise my saving grace.
But even those stocks were not selected with a coherent strategy like GG. But doing so is my Y2K resolution, and look forward to participating on this and GG e-thread.
Seeya
Mike |
