"The Gorilla Game" is an invention of the 15-year bull run
Greg,
From your comment above, it appears that you have not read the manual. I don't post much here, but have been an active reader of the thread for around 2 years. One thing I learned early on is that reading The Gorilla Game is an absolute prerequisite to interacting constructively here (and properly understanding the discourse). Unfortunately, the term "gorilla" is often used in the popular press in a way that doesn't fit the strict definition of the manual. If you would like read the manual and politely debate specific tenets of the Gorilla Game, I'm confident that your comments will be welcomed.
The manual addresses the characteristics of extremely good tech companies with high barriers to entry. It does not focus primarily on valuation of those companies; hence, it's not particularly helpful as a short-term strategy and/or in finding the optimal short-term entry/exit point. The Gorilla Game also doesn't protect against the inevitable volatility inherent in a major market meltdown such as the one we've experienced the last 15 months. (In fact, the manual makes it clear that gorilla stocks can be extremely volatile.) One simple point it does make on valuation is that true Gorillas are almost always undervalued in terms of risk/reward if purchased as a long-term investment. In my opinion, nothing has happened in the last 15 months that disproves that view. (In my case, since I'm dollar cost averaging, it just gives me an opportunity to buy more of the gorillas at a lower price.)
I've been employed in technology-related work for about 15 years, and The Gorilla Game is the best articulation I've ever seen of the types of phenomena I've observed in the tech industry as they relate to investment. In addition, it provides a helpful nomenclature and framework for discussing these phenomena. I began "Gorilla Game" investing in earnest in January of 2000. Needless to say, I've lost a lot of money since then. However, this was not because the tenets of the game were fallacious; rather, it was due to the crazy valuations accorded to the tech sector in general (not just gorillas). Fortunately for me, the Gorilla Game steered me into companies like Seibel and Qualcom rather than many of the "dot-bombs" that were hyped during that time. The "dot-bomb" investments would be truly lost money; whereas, the gorilla companies are great businesses with significant competitive advantages, and I'm confident they won't result in actual losses at all, since they'll eventually come back and shine (and probably improve their market positions as a result of the downturn). I still believe in the tenets of the game, I'm tightly holding my "gorillas" like Seibel and Qualcom in a taxable account (college account for my pre-school kids) and I have even added to those positions.
I certainly agree that it's quite possible that we've all been deluded here, and that "Gorilla Gaming" could turn out to be a terrible strategy over the next decade or so; hence, Gorilla Gaming is not the only strategy I employ, and I (and, I believe, most others here) don't cling to it credulously. However, at this point, I believe it is the best strategy for technology investing. In fact, if you combine the strategy articulated in The Gorilla Game with some valuation analysis for choosing entry points, I believe you are about as close as you could get "what Warren Buffet would do if Warren Buffet understood tech." Nevertheless, if you can show me specific reasons why the strategy is unsound, I'm certainly open to them. |
