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

To: Mathemagician who wrote (22052)	4/2/2000 2:47:00 PM
From: Mike Buckley	Respond to of 54805

mathemagician, I agree that there has always been confusion about the term candidate. If I understand Frank's and Lindy's original intentions, the word "candidate" that appears in the thread title implied at the time that candidates would be submitted for election into the Hall of Fame of sorts of established Gorillas and Kings. As discussion soon ensued, it became evident that the thread could also include the discussion of companies that had not yet achieved that exalted status but might be close to it. Those were put on Justin's Watch-and-Wait list. That list, in essence, became a list of "candidates" that might become Kings or Gorillas, which inevitably cause the term to be confused with the same term as used in the title of the thread. There is the added confusion that companies were moved from the W&W list to the other list when their market caps became as large as $10 billion even though they had not yet achieved the status of full-fledged King or Gorilla. If I haven't got the details about all the above right, I trust that Frank and Lindy will correct them. From the point of practicality, I believe we can handle the discussion of companies on the W&W list as well as discussion of full-fledged Kings and Gorrillas in one thread. No matter where we discuss the W&W-type companies, there will always be the issue of whether or not we discuss the companies just beyond the boundaries of the W&W scenarios. I hope that puts my thinking into perspective. The last thing I would want you thinking is that we won't want to continue discussing W&W-type companies or companies that should be considered for addition to the W&W list. But the content of the folder is always up for open-minded discussion. --Mike Buckley

To: Mathemagician who wrote (22052)	4/2/2000 3:48:00 PM
From: Mike 2.0	Read Replies (1) \| Respond to of 54805

Mathemagician, a mea cupla is in order re INTF...although I view the technology as a niche not a gorilla habitat, you bought this application software vendor in the bowling alley stage as of course TFM recommends. I was flipping through it, saw that principle and immediately thought of your commentary & write-up on INTF. You clearly bought at the right time. Given the run-up, I would want to see additional pins being knocked over outside of financial services before considering jumping aboard. Good investing, Mike

To: Mathemagician who wrote (22052)	4/2/2000 5:30:00 PM
From: John Stichnoth	Respond to of 54805

Re: much maligned candidates Two issues-- (1) Companies that will never be big enough to be called gorillas. Candidates for true gorilla-hood are not maligned, it is candidates for niches, presented here as gorilla candidates, that are maligned. The manual makes a distinction between sizes of markets that are dominated. Small, non-mass-market markets cannot contain gorillas. The FM uses the example of Applied Materials as a company that never reached Gorilla status because it decided to stay in a niche--a profitable niche, and a pretty large one, but not of the same scale as gorilla territory occupied by such companies as MSFT, ORCL or CSCO. The difference shows up in their market cap potentials. An example (and a confession :o)): Early on in my involvement with the thread I proposed a company named Zi Corp. They are a software company, with application in wireless devices. Definite tornado potential territory, definitely proprietary and open. The trouble is (and was) the potential from their product line is definitely limited. They may turn out to dominate their area, but the area will be small. Their CAP potential is limited. And Zi didn't (and doesn't) belong on the thread. I think that we have moved the limit of Gorilla CAP potential down somewhat, so most would state that AMAT is a legitimate topic here. But the objection I think I'm hearing is that a company with the potential only to reach a couple-billion dollar market cap (aka a shiny pebble) is not really the aim of this thread. (2) Candidates that are too early in their development to merit consideration. (aka Story Stocks) The other issue is the time we start talking about them. LindyBill doesn't want to start talking about stocks with less than $10 Billion market cap. While I think there is general agreement on the thread that we can be flexible on this, I do understand his point. When you start talking about a micro-cap, you are putting a lot of faith in "the story". One of the attributes of a gorilla is that it has proven that it can execute. A company that has no sales, that has never ramped up production, that has no track record of establishing its products in the market place, cannot hold the same respect from Gorilla hunters as companies with proven track records. A contrast: GMST vs. IATV. Both are addressing complementary software areas inside the settop box. They both, by all accounts, are in similar stages of demonstrating their IPR holds. Gemstar has shown an ability to deliver earnings, for years. IATV has shown an ability to spend money. Which should we be paying attention to here? The consensus is that GMST belongs, but IATV doesn't. That doesn't mean IATV might someday become a legitimate topic, but for now the consensus is that if someone wants to discuss it, they should do so either on IATV's thread, or maybe on the fledglings thread. This latter point addresses why Wi-Lan probably doesn't belong on the thread as a Gorilla candidate. It may hawever be a legitimate topic with reference to Qualcomm. It may help us understand the Q's potential better to discuss Wi-Lan. Best, John