Probably the most difficult concept for me to grasp...
...has been the notion that locating a gorilla is something that requires all the pieces to be in place simultaneously and the defining characteristics to be established unequivocally. As I started my Gorilla project on SanDisk I noted the (potential) pieces of the puzzle were almost all there, but scrambled to the point of being almost unrecognizable. The reason for this is the Internet environment where we are living. That may seem counterintuitive.
I see two powerful and confrontational forces. First, the ready availability of information on the Internet tends to "fast-forward" the investment horizon prematurely. This tends to propel select stocks upward primarily based on promise, hope, emotion and momentum that gets whipped up into a frothy lather. The opposing force is reality. Reality happens in real-time, but compared to Internet speeds this is super slo-mo. The tug-o-war is responsible, in part, for the unbelievable volatility we have witnessed in many Gorilla Game candidates.
TODAY, was a perfect example of how reality is beating out the fast-forward button. The endorsement of SanDisk's SDMC by Palm Computing has been disseminated as fact, but it will not bear fruit for some time. The stock sagged on the announcement. The same can be said with the QCOM endorsement of MMC. The same can be said with the Microsoft Pocket PC endorsement of CF. The same can be said with the Toshiba JV or even the legal defeat of Lexar Media.
Until such time that SanDisk is able to capitalize on these individual agreements the market is interpreting them as fluff. This may seem unjust, but the degree of caution in the current market necessitates this. Many of the major SNDK press releases in the last 6 to 8 months only demonstrate potential, not a tangible contribution to the bottom line. In the interim the reality of the situation is that SanDisk has made substantial gains over the last 24 months and is now positioned to benefit from its drawn out preparatory phase. I still think many current SNDK investors are still too far ahead of the curve -- a very frustrating place to be. (I don't think this is an unusual position for a GG hunter to be in, especially if they have done the required research and have formulated a strong opinion about a given stock.) The market appears to be requiring a higher standard of proof; a distinct dose of reality in the form of earnings acceleration, a definitive legal victory with corresponding royalty payments, substantive sales in the forming tornados that benefit the company directly,... We are still several quarters away from this.
PATIENT GORILLA GAME HUNTERS REALIZE THIS FACT.
I understand now why there was a period of silence here on this thread at the time of my original SNDK presentation. Although the relative silence was difficult to take because of the personal effort involved, I now fully recognize how laborious it is to start looking into a wholly new investment from scratch. It is also easy to give a potential investment time to ripen on the vine before plucking and biting into it. I have built up the same barrier to new investments. (Or is it a high-pass filter?)
I wanted to state for the record that, more than anything else, my SNDK presentation here was an exercise. I have come to realize that certain portions of the discussion were soft. With time certain premises have been challenged, and rightly so. Clearly Mr. Market has also noted chinks in the armor.
There are still several unfulfilled pre-requisites that are holding SNDK back. Many have been discussed here in some detail. I think 2000 will be a pivotal year in many respects. Execution and chance still factor into an investment in SNDK. Impatient Gorilla hunters investing in SanDisk are pinning a lot on "the story", the immense potential and faith in management's execution. Unfortunately these aren't true GG characteristics.
Ausdauer
(the guy incessantly punching the fast-forward button) |
