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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Uncle Frank who wrote (19105)3/1/2000 3:02:00 AM
From: John Stichnoth  Read Replies (3) of 54805
 
But, Frank, the manual was written before the Naz doubled in 3 months (or whatever it's done). It was written before csco had run from about a 100 pe to present 180. And before orcl had run to a 153 pe. There is a lot more discounting of future earnings going on than when the manual was written.

Remember, the manual also proposes a terminal date for a company's gorilla advantage--see pp 124ff, "The Death of a Gorilla". When did IBM's gorilla mainframe paradigm get taken over by the desktop paradigm? When will Intel's silicon chip paradigm get taken over by a successor technology (or get commoditized as Christensen's "good enough" threshold is achieved and the market decides we don't need faster processors)? And when will msft's desktop hegemony turn irrelevant as specialized and open non-proprietary and embedded OS's nip away all around Softee's edges, leaving them only the non-growth desktop sector?

All questions for consideration. I don't think a single answer is possible. And while the market "consistently" undervalues Gorillas, I'm getting to the conclusion that it is doing so less consistently now than it was last year.

On jdsu--My own conclusion is that it is somewhere between gorilla and king. There are some substantial barriers to entry. There is IPR development going on. And my understanding is that the market doesn't distinguish between kings and gorillas in pricing in the early growth stages.

Best,
John
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