The biggest risk with Gorilla investing is not overpaying for a Gorilla, it is to pay a "Gorilla multiple" for a stock that does not turn out to be a Gorilla. I think if you do Gorilla as your investment strategy, this is very likely to happen, even if you are careful. The few hits will have to pay for the many misses.
FWIW, I worked for many years at a company that was considered a Gorilla in it's heyday and then the stock lost 99% of it's value during the years. From my experience, it is difficult to become a Gorilla just being a technological leader alone, in fact I would argue, if it is just technological leadership, the company in question is most likely not a Gorilla. It is technology together with network effect, brand recognition and market share and other factors that make a company a Gorilla. I think someone could develop a better search engine or a better Sol I also network website and still would not be able to dent Google or Facebook, because user adoption and network effect are driving factors that give these companies and enduring advantage.
I also had my share of misses with growth/Gorilla stocks, but then I can also say I made out very decently working for a company where the stock went down as much as it did. |
