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

To: Uncle Frank who wrote (19118)	3/1/2000 9:57:00 AM
From: Mike Buckley	Respond to of 54805

Frank and all, but I'm sure we'll hear from Merlin <g>) Yep. Count on it! :) a stock's price is based on the market's expectations for its cumulative future earnings, Yes, but acknowledgement that Gorillas are usually undervalued dictates acknowledgement that the market is usually wrong about its expectations. That in turn leaves open the possibility that the market can also be wrong by overvaluing a stock. it is reasonable to assume that future earnings can be predicted with more accuracy for a King than for a Gorilla, whose lengthy earnings run deviates dramatically from the norm. I understand your point, and I think it will be proven to be valid in specific cases, but I could just as easily argue that it's more difficult to value a King because it hits the brick wall more unpredictably. If I buy a King as a long-term investment today and six months from now a competitor emerges, seriously threatening the Kingly status, my long-term mentality becomes short-term by necessity and could easily cause me to sell at a loss. That's why I don't (knowingly) buy into royalty games. --Mike Buckley