Gorilla and King Portfolio Candidates Message Board

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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Uncle Frank who wrote (47993)	10/17/2001 11:07:36 AM
From: hueyone	Read Replies (3) of 54805

Interesting that despite his devotion to valuation, WB has maintained a long term position in KO through difficult times and what appears to be serious overvaluation based on what he judges to be sustainable competitive advantages. Hello U F: This similarity between Buffet and Gorilla Gaming with respect to LTB&H of great franchises has been mentioned on this thread frequently. But there is at least one huge, dramatic difference between Buffet's investing and Gorilla Gaming investing as recommended by the manual that needs to be mentioned yet again, and imo, cannot be overemphasized: Buffet will only purchase a stock (a "business" is the term he prefers) if he expects the present value of the future "owner earnings" from the company to exceed his purchase price. The manual, with its total neglect of valuation, is implicitly making the assumption (erroneously) that the present value of the future "owner earnings" from the Gorillas will exceed the purchase price because "Gorillas tend to be undervalued". This was a bad message to be sending during the bubble and I am still disappointed that Paul Johnson kept it up to the last. Best, Huey

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