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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (3079)	6/24/1999 11:40:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

OFF TOPIC (partly. Other parts are on-topic.) Chaz, Thanks for your thoughtful comments about the Fool. When you mention that their threads are pedestrian in nature, remember that the primary business model of the Fool is to attract (and ultimately teach) novices. To the extent that the Gardners and Gang are successful in doing that, they will do our society a world of good and become insanely, deservedly rich in the process. Your thinking that the Fool is more focused on small caps is, in my opinion, not really accurate. The organization was more focused on them five years ago than now. As an example, many chapters of their first book is dedicated to small-cap investing while today I think only one of their five (I think that's the right number) online, real-money portfolios owns any small caps. As much as I love the discussion in this thread about gorillas and kings, I tend to disagree with the prevailing thought here that small-cap stocks are tremendously risky. My thinking is that if a rigid set of criteria are adhered to, the risk of small caps is lessened. And it only takes one or two very successful small-caps to much more than compensate for the losses in a bunch of others. In fact, probably the most important single lesson I learned from the Fool is that a portfolio can suffer a number of relatively terrible mistakes and still end up outperforming the broad market. (My portfolio and mistakes are proof of that!) AOL was a small-cap when I bought it and was probably my single best investment ever. (Imagine what it would be if I hadn't sold it a couple years ago. Dumb mistake!) Iomega was a small-cap when I bought it and it is probably my second best investment ever. Siebel was a small-cap when I bought it. Citrix was a small-cap when I bought it. And Qualcomm was a small-cap when most of the people on the Q thread got the religion about that one! :) Looking at the track records of those companies -- ignoring the stocks entirely -- builds a case that the only thing better than buying a large-cap stock that does well is buying the same stock before it becomes a large-cap. (I'll no doubt hear from my friend, Lindy, about that, in which case he probably won't be able to offer any new insights nor will I.) To demonstrate that I'm trying my best to be objective in my opinion of the Fool, I wish they had not gotten as far away from valuations as they have. (Only one set of their real-money portfolio managers adheres strictly to valuations as a criterion for purchase.) I don't have a problem that they have changed their stance somewhat about the qunatitative importance of valuations in the nearly five years they've been online. But I do find it very ironic that the single most important tool I learned from the Fool -- valuation -- is also the subject that is now so much less important in their current way of thinking. As always, it's just my opinion. And I'm always appreciate of yours even when we disagree. Maybe especially when we disagree. :) --Mike Buckley