A lot of data, but what's your point, BB? Are you trying to encourage us to invest in the dells, aols, and amazons of the world? If so, you've missed the main message of the fm and the rfm. Many of us have tried King/Prince/Shiny Pebble investing and done pretty well at it for periods of time. But we've decided that Gorilla gaming is a better LT strategy. That's the raison d'etre of this thread. Once again, what's your point?
What's my point? The original poster asked this question:
One of the assumptions we've (I've?) been operating under is that gorilla's have the best and safest returns in the market. But is that so? Have we questioned that assumption? Haven't kings like EMC, JDSU and DELL had as high or higher returns?
I was simply dissastified with Lindy's answer to the original poster's question (straight life, I believe). I thought pointing out a couple of historic returns for Gorillas as well as a stock or two outside of the Gorillas was an obvious way to address the question. I will repeat again that I have not missed the main message of the collective wisdom of Moore/Kippola/Johnson which transformed itself into The Gorilla Game or the revised version - which is what I am going with from here on out in terms of reference.
We should indeed question the wisdom found within the manual(s). The revised manual supports my view that a portion of the Gorilla Game will be played out in the realm of the Godzilla Game going forward. That's why the authors presented the revised manual. A winner take all game. Hence, my attempt to grasp this portion and my work over on the Godzilla message thread. I'm not advocating anything to any other investor.
This message thread has the title King in the name and therefore we owe it to ourselves to view the returns and safety level of Kings as well - despite the fact the author's say to hold them lightly. If one had bought Compaq in 1986, along with Intel and held until yesterday. The return is fairly similar in spite of the fact that Compaq's woes cut the stock price in more than half this year. In terms of safety, even if one had held that King until yesterday and sold, the return would only be 500 percent lower than Intel's for the same 13 year time period. That's a 384 percent annual gain for 13 years which beats the market by my measure with a high degree of safety. Microsoft and Cisco are the only two Gorillas that have provided really stunning returns historically for the Gorillas. We can easily say that before Cisco was traded in 1991, Microsoft was thee stock to own and probably still is. EMC, a King, would have given the same return between 1986 and today as database Gorilla Oracle. That's over 1,100 percent annual gain!
Depending on the amount of capital one has to invest, the historical gains seem to support my theory that provided the royalty plays are tied into a technology wave that has longevity (such as the PC wave), good management can offer a degree of safety that will wallop historical market returns. Even if you consider Compaq a failure and think it was mismanaged, one has a nice return to show for it. It nearly matches Intel to date. Dell nearly matches Cisco and Microsoft to date. There are many valuation metrics one can tap into for choosing excellent growth stocks that exist in the value chain that the Gorillas provide. As long as the value chain exists, there will be royalty game companies that thrive within the chain.
Look at the gains of the below Godzillas even though most of them are 40 to 80 percent off their highs.
I neglected to add these in my earlier post due to time constraints:
Kings
EMC: 1986 to present shows over a 15,000 percent gain
JDSU: 1994 to present shows more than 12,500 gain
CPQ: 1986 to present shows about a 5,000 percent gain
Godzillas
eBay: 1998 to present shows about an 800 percent gain
DCLK: 1998 to present shows about an 800 percent gain
YHOO: 1998 to present shows a 1000 percent gain
AMZN: 1998 to present shows about a 1,400 percent gain
AOL: 1992 to present shows over 45,000 percent gain
Prince on the move
DELL: 1989 to present shows about a 40,000 percent gain
Gorillas
INTC: 1986 to present shows about a 5,500 percent gain
CSCO: 1991 to present shows over a 42,000 percent gain
MSFT: 1986 to present shows over a 41,000 percent gain
ORCL: 1986 to present shows over a 15,000 percent gain
SAP: 1996 to present shows a gain similar to a corpse....
ITWO: 1996 to present - 150 percent
SEBL: 1998 to present - over 175 percent
QCOM: 1996 to present - about 1000 percent
GMST: 1996 to present - about 1000 percent
It's obvious who has won the return game to date: Cisco, Microsoft, AOL and Dell. The latter two were even higher until they retraced - or as some on this board believe stumbled. I am not advocating that similar returns will be an investor's reward going forward in any stretch of the imagination. I also am firmly planted in Gorilla Game investing with what was, until AOL and DELL took off, the major portion of my portfolio. However, a couple of 40,000 percent gains in two of my stocks have adjusted the balance of my holdings for the obvious reasons.
The manual's authors saw the importance of the Internet as the new Gorillla important enough to revise the manual, develop a method for the Gorilla Game investor to score and value the stocks and present their case in terms of playing the Godzilla Game. It's a different game for sure. I am not encouraging any investor on this thread to change what they personally believe in terms of their Gorilla Game investing strategies by stepping into any Royalty Games or Godzilla Games. I just felt it was important to present some historical returns that addressed a question about Gorillas vs. Kings.
I own all stocks listed above in a LTB&H portfolio, save Compaq, SAP and eBay. I'm sure that my diverse method of investing in the three games of Gorilla, Royalty and Godzilla is not for many investors. Likewise, I have read methods on this thread that wouldn't be for me. Yet, I don't see the harm in addressing the question of returns between the three historically and going forward if a poster like straight life asks. I was in no way advocating my approach, just addressing the issue.
Since your last what's your point? question to me, I have tried to focus my posts on this thread strictly within the realms of the Gorilla Game as it pertains to Cisco, Intel, Microsoft, Oracle, Siebel, i2, Qualcomm, Gemstar, the Kings and my mistake of buying Rambus too soon.
I will make an effort to self police myself in the future within those constraints so as not to upset the apple cart of le raison d'etre of this thread.
BB
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