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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: mtnlady who wrote (15984)1/23/2000 12:11:00 AM
From: DownSouth  Read Replies (1) of 54805
 
Someone mentioned here 100-300% increases are the 'norm' during a tornado. WE DO NOT SEE SUCH RETURNS FROM A GORILLA. Slow, steady, strong growth.. but not 100-300% returns.

This statement causes me to wonder if you understand the Gorilla Game.

We certainly do see these returns from Gorillas. We see even better returns from them during the tornado. I have owned INTC, MSFT, QCOM, and CISCO during years where 100% was a disappointment, year after year. And these returns were during the tornado after they were the gorillas.

I do not believe that the life of gorillas will become shorter. I believe the length of time that a tornado lasts will become shorter, but more violent and profitable for investors. The Gorilla will get to main street faster, which is where INTC, MSFT and CSCO seem to be now. (CSCO is trying to start a new tornado in VOIP.)

#2 in the market usually does pretty good too. All of my #2 companies that I've held have been bought out by someone else at a pretty penny. So owning #2 sometimes has been as lucrative as holding #1!

Good point with plenty of antecdotal evidence, but one objective of the game is to reduce risk while maximizing profit. Holding number two increases risk, Are you willing to bet on #2 being purchased before its margins and market share cause its price to rapidly decline?
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