Thread--More on market corrections (following up on que seria's comments)
Rule 10 applies--Ignore most information.
The market moves on short term information, mostly just the stuff that Moore advises GGers to ignore. For most companies that is absolutely the correct response for investors. The long term success of hyper-growth companies is not assured, because of the volatile nature of their markets. (And, this is why Kings are not like Gorillas, and should be held lightly).
But, Gorillas are different. Their long-term success, in the face of a tornado which they control, is assured. The only threat is of events that might threaten their position at the center of the tornado.
In terms of earnings, we can be confident that over the next few quarters gorillas that we hold will continue to grow at 10% per quarter sequentially. (That can't be said of the chimps.) With Gorillas, we can be confident that they will grow through a downturn. That makes them different.
On EMC--Their position is essentially kingly. (My understanding is that they have no IP to protect their position.) NTAP is a threat to them, partly because (1) their different solution to the storage issue appears to be superior in most situations, and (2) their solution includes at its core a proprietary-open software standard. So, holders of EMC are warranted in continuing to hold, but they should watch the developments wrt NTAP as a key to when they should exit or switch.
Just some thoughts.
Best,
JS |
