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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Mike Buckley who wrote (24653)5/13/2000 11:04:00 AM
From: Uncle Frank  Read Replies (1) of 54805
 
PORTFOLIO BLUES: YOUR FAULT OR THE MARKET?

The Gorilla & King portfolio, which is based on investments in the thread's most popular consensus Gorillas and Kings, is showing amazing results year-to-date with a return of 5.2%. It's a tribute to both the collective wisdom of the thread and the merits of a diversified, unweighted portfolio. Maybe Group Think isn't such a bad thing after all <gg>.

Few if any of us have matched the GKI's performance, primarily due to overweighting in specific companies or infatuation with Shiny Pebbles, and there are some important lessons to be learned. But before we judge ourselves too harshly, we should remember that a falling tide drops all boats; the last 6 weeks of the market have been brutal.

To help put this in perspective, the following table shows both YTD and 2nd quarter performance of the 10 outstanding companies that comprise the GKI. 


                  YTD RETURN    2nd QTD RETURN
          SEBL       53.6            8.0
          NTAP       40.1          (29.7)
          INTC       39.8          (12.8)
          EMC        16.7            1.2
          CSCO       11.9          (22.5)
          JDSU        6.6          (28.7)
          SUNW        5.2          (13.0)
          GMST      (36.9)         (52.3)
          MSFT      (41.1)         (35.2)
          QCOM      (44.4)         (34.4)


My conclusions:

With 8 of 10 of our primary G&Ks underwater for 2Q, it is unreasonable for anyone to blame themselves for bad stock picking.

The fact that 7 of 10 G&K components are in the plus column would seem to confirm that Gorillas and Kings still represent the best chance for superior returns once the market recovers.

Six weeks or even six months is too short of a time period to judge a ltb&h investment strategy. Staying the course is the most reasonable action at this time, despite the pain.

The fundamentals of these 10 companies, with the notable exception of Mr. Softee, seem stronger than ever. They should outperform lesser companies in both bull or bear markets.

Happy Mothers Day Weekend,
uf
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