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

To: Casaubon who wrote (16833)	1/31/2000 10:23:00 AM
From: Bruce Brown	Read Replies (1) \| Respond to of 54805

I also believe tech stocks are the last to get hit, when entering a bear market. Given the proclivity of momentum investing at this juncture in time, I can not convince myself to enter such a strategy until a severe sell-off occurs (Which might now be happening). I will look for clues of a bottom in these stocks and try to digest the strategy. Thanks. Proclivity? Damn, I haven't used that word in years. Bravo! Depending on which gorilla game investor you speak with, many of us were invested long before any proclivities were viewed by others. There, I used it and I feel better.... I see you spend time on the market direction discussion board, gold price monitor board and how to write covered calls message board. Certainly a dire contrast to gorilla game investing. However, since you have admitted not reading the book, there's not much point in continuation of the discussion. Happy bottom fishing and think 'enabling technology'. Okay, I cannot resist. Bear with me, if you can. You may have noticed more than a few computers on this planet use some form of a Microsoft operating system. You may have noticed that many of these computers have a microprocessor made by a company called Intel. You may have noticed that Cisco is not what Grandma cooks with - that's Crisco and we all know how unhealthy that kind of grease can be. However, Cisco is the grease that connects all those PC's together in the world and has been a very healthy grease to digest as an investor. One has to do with networking while the other has to do with shorting - I mean shortening. <vbg> Likewise, we are noticing there are other companies that are worthy of notice for our portfolios that have the qualities we are seeking - regardless of bears or bulls or economic cycles. I'm not denying economic cycles and the resultant movement in the indices from those cycles exist, but the attention given to our fascination with the companies that provide the enabling technology will iron out those wrinkles over the years as investors - whether a 'bear market' lasts two months, two years or even longer. That's a fact that we all have to deal with and I was curious how you happened to venture on to the Gorilla and King thread? The best way to 'digest' the strategy is to read the book and lurk along. It just might alter your horizon. BB

To: Casaubon who wrote (16833)	1/31/2000 5:34:00 PM
From: John Stichnoth	Read Replies (1) \| Respond to of 54805

Gorilla investing is at heart Value Investing. Short term price swings occur as momentum takes over temporarily. But, Gorillas are distinct because the risk of their not meeting forward earnings projections are much smaller than for the overall market. (Example: QCOM is projected in Zack's to grow 35% per year for the next 5 years. I am a lot more confident that they will hit their numbers than I would be that LU can hit theirs). Investors buy the net present value of the stream of future earnings. Value Investors who buy based on favorable Book-to-Price ratios are essentially betting on liquidation of the company (directly or indirectly, and whether they know it or not). Value investors who buy based on PEG, and its relatives or variations, are buying earnings. Gorilla investors are able to look further into the future, with assurance, of what those earnings are going to be. Investors are a different animal from Traders. Traders operate in a zero-sum game, and on the Greater Fool theory. Momentum Investing is an oxymoron. A momentum player buys in the belief that the stock will continue going up (regardless of fundamentals), and there will be a greater fool out there to buy his shares when he wants to sell. Momentum is short term. It is not investing. I can buy QCOM at today's price (even if the current PE is a stretch) because I know I'm going to hold it for 5 years (actually, I'm not selling for 10 years, if ever). In 5 years, QCOM's eps will be 5 times 2000's. And it will still be on the same growth path. The PE won't be nearly the stretch, then. These same arguments can be made, with greater and lesser force, for various other stocks we discuss around here--CSCO, GMST, MSFT, etc. And, these are statements that cannot be made of other techs, such as LU, Alcatel, the internet portals, etc.