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

To: DownSouth who wrote (11891)	12/3/1999 5:29:00 PM
From: BI*RI	Read Replies (1) \| Respond to of 54805

<<uw, I believe so. The reason I say so is because about last Feb I started buying JDSU, PMCS, CNXT, BRCM. Overtime I narrowed it down to just JDSU and PMCS. If I had held on to BRCM and added RMFD, I would have done almost as good as I did with just PMCS and JDSU, I am pretty sure. If I weren't so far along with my narrowing down to JDSU and PMCS, I would go back and buy a basket. THis may be a royalty game though, so be careful On the other hand, JDSU is a King, so why bother with the rest?>> You have already gone through a process that I am trying to avoid. BRCM looked real good to me in April, at the same time I first bought JDSU. Since then, SDLI, PMCS and RMFD have also tempted me, as does QCOM right now. My thinking has been exactly what you have just described: While the others have had stellar gains, maybe equal to JDSU and PMCS, you are just as well off having concentrated in one or two. It's easier to follow and focus on a few as opposed to many. Yes, once you add more, the risk goes down, but so do the potential gains. This thought process prevents me from buying NTAP to go with my EMC, for I'd be spreading the same investment over two stocks in the same sector with likely similar returns. Both are likely to do very well, but I'll go with the King that has demonstrated consistent growth and excellent management. So, I don't agree with your statement "I would go back and buy a basket", but do agree with your thought process that leads you to conclude "On the other hand, JDSU is a King, so why bother with the rest". I'll admit that I haven't read the Gorilla Game yet (I bought two books and lent GG to a friend while I read the other one, the friend is now across country and has yet to sent GG back), but how many will admit that they haven't read The Warren Buffet Portfolio? The latter book is the second one I bought and it deals directly with focus investing, making the case for investing in only a "handful" of stocks for superior returns. The key is "high probability events" (ie. gorillas?). Many posts on this thread have discussed the risk of having only 3 or 4 stocks; Buffet, Graham, et als recommend such a concentration. The book cites the evidence to support it. Marc