You want me to quote chapter and verse?
OK.
The Good Book (Gorilla Game, revised edition 1999) says:
page 19: gorilla-candidate stocks are virtually never undervalued in the sense that a value investor means.
page 15: Key virtues of the gorilla game: #2: Limited downside. The gorilla game takes no bet-on-the-come risks.....Now, it is very hard for any company to lose money in a hypergrowth market, and thus you can expect not just the gorilla stock, but also the other stocks you buy, to go up, not down, over the period that you hold them.......gorilla portfolios are the most resilient there are.
page 16: In the final analysis, we think the gorilla game is a particularly appropriate approach to investing for private investors who are risk averse.....
I couldn't find a succinct quote where they say that gorilla companies have earnings that are more predictable for further into the future than other companies (and therefore deserve permanently higher multiples). However, there is a discussion of the longer Competitive Advantage Period of gorillas, and why the length of this time period justifies high P/S ratios for gorillas, on pages 108-110. Specifically, the authors say CSCO is a good investment, to buy and hold, at a P/S of 19. And they repeatedly state that a gorilla stock should never be sold, unless there is a substitution threat. Nowhere in the book is there any discussion of the possibility of any gorilla becoming overvalued.
JS@insomnia.pov |
