>>Gorillas represent a conservative approach according to the book. I think I saw on this thread that overall the W&W portfolio is ahead of the G & K portfolio. Why do you suppose that is the case?
I love your questions, Tom. They are thought and theory provoking. Imho,
1. Why is the W&W portfolio ahead of the G&K portfolio?
The W&W candidates were chosen in March, April, and May. Nobody nominated a stock that hadn't already had a great return in the early part of the year. As a result, we skipped the sector basket phase, where we would have normally chosen a high percentage of dogs that would have dragged down that index. Some of the W&Ws have already shown signs of backing off their early 1999 run ups.
2. Why are Gorillas and Kings a conservative investment strategy?
You can spot them after they have emerged and still expect superior returns. Their market share and, in the case of Gorillas, ipr's allow them to rule their sectors and maintain their growth for prolonged periods.
I see Microsoft as the prototype Gorilla and Motorola as a great Prince. Let's look at their comparative 100 month graphs:
techstocks.com
For the first 40 months, mot yielded the better returns, but since it was not a rule maker, it eventually became handicapped by its very size. Otoh, Mr. Softee has continued to show superior growth with signs just emerging of a slow down (but not a cessation).
Many of us are completely happy to accumulate Silverbacks and aging Kings and participate in the slow, safe ride they provide in their latter years. But the Holy Grail of this thread is a young Gorilla, where we can take advantage of the agility and momentum of its infancy.
Many of us think we've found that in Qualcomm; time will tell.
FranQ |
