Chaz, while I recognize that you are primarily interested in finding small cap companies that offer spectacular growth, you have been around the G&K board long enough to understand what I was saying.
>> Uncle Frank: "Gorilla stocks are the only sure things." "Sure" in what way?
Let's avoid the GG metaphors and cut to the chase. I firmly believe that in the long run, market valuations correlate to top line and earnings growth. Companies with a large market share based on ipr that is essential to a rapidly growing sector are as close to a lock as can be found in the market.
>> Cisco which is a gorilla dropped more than 40% twice within a two year time span.
The last time this happened was at the end of 1998 during the Asian Flu season. I was a csco long before the precipitous dip, and was lucky enough to add during the down period. Let's review what actually happened:
csco peaked at 66.4375 on 9/25/98
csco bottomed at 43.875 on 10/7/98
csco set a new high of 67.8125 on 11/5/98
csco hit 112.375 on 2/2/99
The drop from 66.4375 to 43.875 was a 34% retracement, but by early February it had gained 69% over the September high!!! Unless you were a trader, csco's drop was a non-event.
Very soon we will have the same story to tell about Q.
>> Microsoft is considered a gorilla but even Geoff Moore suggests it may have an infected tooth.
Moore was speaking about msft's short term stock trend, not the company. Check Mr. Softee's top line and earnings growth, Chaz, and you'll see that its excellence is unabated. Once it settles the DOJ suit it foolishly entered, it will reward its investors handsomely.
>> "Sure thing" implies a degree of certainty and stability that I for one would be hesitant to use for any company
I think you get the drift by now. I was referring to the company, not the stock price. But I am convinced that stocks like msft, csco, intc, qcom, sebl, etc., Gorillas if you will, are a sure thing to outperform their lesser endowed brethern. Mr. Market can squeeze valuations on a regular basis, but imo these tech leaders will be the last to go down and the first to recover.
uf |
