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

To: Mike Buckley who wrote (10257)	11/13/1999 11:47:00 AM
From: Grantcw	Read Replies (2) \| Respond to of 54805

Mike, Chaz, and Bruce: I appreciate the discussion on diversification or "diworsification" as Chaz calls it. I'm glad to know that at least one Gorilla Gamer sides with me, Mike. I'm not talking about selling QCOM to take home and plugging it into a CD, I'm talking about diversifying my profits into other Gorillas like maybe CSCO and GMST. The reason I didn't diversify earlier is basically because I didn't have the free cash to take a large enough position in other Gorillas, but now I do. I personally now think the potential returns for GMST may have caught up to the potential returns of QCOM after its big run. As for trying to make enough money to retire from my job and do the things I've always wanted to do, I'm too young (23), with too few dollars to be able to achieve that level with QCOM. Furthermore, I'm pretty happy with my life situation right now. I like my work a lot and I'm not working too many hours, so I can enjoy my leisure time in a variety of ways. To me, the Gorilla Game/stock market is more a game of fun to me than anything else. Sure, "the Game" has helped my investment returns recently, but the things that I enjoy in life don't really cost too much money: Friends, family, my fiancee, God. I'm really pretty happy in my life without having too much money. The only thing that has been stopping me from enjoying the things above, recently, is the time that I've spent monitoring QCOM. It's been hampering my work a lot, and I've been choosing to monitor QCOM over hanging out with people. That's not where I want to be, and I'm going to diversify into other Gorillas to cure the problem. Mike, you have an intriguing way of looking at diversification. My strategy was just to sell QCOM as soon as it reached my intolerance level, which I found out is probably somewhere between 55-65% of my portfolio. Thanks for the input guys. Grant

To: Mike Buckley who wrote (10257)	11/13/1999 12:29:00 PM
From: Bruce Brown	Read Replies (2) \| Respond to of 54805

Diversity continued.... The December issue of Red Herring has a nice article on page 372 entitled "Are you overweight?". No, it doesn't have a thing to do with diets - although my recent summer sojourn to the US would confirm that many Americans could benefit from reading such an article. ;-) The sub title of the article is Carrying too many high-tech stocks can put your portfolio at tremendous risk. A quick read of the article lists various methods and strategies as well as 'rules of thumb' in determining what percentage of weight one's tech holdings should carry in your total portfolio. There are some that say it should match the S&P's weighting for tech which is 24 percent. Of course, Michael Murphy's formula of having most of your holdings in tech uses the equation of 100 minus your age = what percentage of tech you should hold. I'm 38, so I should have 62 percent in technology. My kids are 4 and 6 - so they have a little higher tech weighting than old Dad who has several growth stocks that fit my criteria such as Amgen, Charles Schwab and Harley Davidson. Don't laugh - the hog heaven is a well managed growth company. Keep in mind that the article is addressed to a wide variety of investors, many that don't have much more than a few minutes a year to make their investment decisions let alone the kind of time and effort those of us on boards like the G&K have encountered. However, I wonder if the freelance writer K. Anne Reinhard understood that the normal audience that reads Red Herring is not the type to have a mere 25 percent tech weighting in their portfolios. For those that are not geared to read the magazine and just picked it up by 'accident', I seriously doubt it if they ever made it all the way to page 372 where the article begins. No matter which formula an individual investor uses, the Gorilla Game can be played well by only having a 25 percent weighting in technology, a 30 percent as some Wall Street analysts suggest, 100 - your age = weighting or whatever one's final weighting ends up being. We certainly know from the manual and the fine tuning methods practiced here that risk aversion, as UF points out, is key. The tech weighting portion that each individual investor is comfortable having will blossom well under the G&K methods we discuss. We all come to the table with different goals and strategies. Some of us believe in a little diversification while others don't. That's okay. I just wanted to make that distinction for any lurkers or new visitors to this thread. BB

To: Mike Buckley who wrote (10257)	11/13/1999 2:04:00 PM
From: chaz	Read Replies (1) \| Respond to of 54805

Risk tolerance is a personal thing. I wasn't passing along ideas, Mike....just responding to your request for comments about yours. In general tone, what you suggested seems quite the opposite of what I am doing. Selling a known Gorilla when it's down seems to me like a good way of mucking up a good thing, especially if one knows or feels it's coming back. (I have vivid, recent experience which demonstrates this.) If on the other hand you know or feel it's not, then that's the reason to exit. 1)The book suggests buying the pre-tornado basket. We here are not practicing that for the most part. How many posts have you read of people "selling junk", "down from 10 to 3", and similar? We're mostly playing Russian Army, and it's working! 2)If you are moving into a second Gorilla (not clear in your first post) to improve performance because the first is limping, well and good, for well and good reasons. Some here are wearing track shoes(Q), some have switched from sturdy hiking boots (MSFT). 3)It seemed to me your senarios both produced fewer profits, especially so if the Gorilla isn't really limping. 4)Doubling the S&P for 10 years is no shabby result. I could do with that, but I could do with 3X my money each year for the next 10 also. For a lot of my investing years, the most volatile part of my equation was me. Shedding that has been a very big help.