Some comments:
1. "Rulemaker" is for Fools and we respect their threads but this is the Gorilla Game thread. You should read the second edition of The Gorilla Game. Then check out the 10 companies to see which fit the definition of gorilla or else a very strong king.
2. You don't have to be told that diversification is a must because of the deficiency of our knowledge and that overdiversification will spoil your performance somewhat because you won't invest the most in the best.
3. There is no magic number of stocks to hold. If I am really sure that the company is a gorilla with a tremendous space to expand into and the price is reasonable then I would put up to 20% of my money into it. After all, you are highly unlikely to lose all of it. I don't think you should hold anything that you'd be afraid to put 10% of your money into it. In this regard I personally am against investing in Intel. It would take some difficult to imagine cataclysm to make it an unimportant, little valued company, but there are signs that they don't know which way to go. Look at the 64 bit CPU chip. Everybody else, MIPS,Compaq(DEC),IBM,HP,SUNW, has come up with one. Only Intel doesn't have one for sale.
They seem also to have difficulty with Rambus. The gorilla status remains but is the domain still exploding outwards?
The internet may put an end to the ubiquity of PC's; of course that will take a long while but if you see clouds at the end of the story, why not pick another? Intel wants to make servers but I don't see their edge over anybody else. Ditto for web hosting. There are different opinions about the future of BRCD's technology. The fact that you only have ~4% of your money in it shows that you too are doubtful. Most of the money I've made from stocks came from a very very few stocks. In my style 10 stocks is too many for anybody. In my case NTAP is now my largest holding, at 30%. But I feel comfortable with six or seven. I like to make big bets, as a way to avoid buying kings rather than gorillas. Bruce Brown makes small bets on young companies and has done marvelously, so there isn't only one way. He probably thinks your investment in BRCD is perfectly sensible. Chacun a son gout,nest-ce pas? |
