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

To: npiwovar who wrote (22392)	4/6/2000 11:39:00 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

>> What is your opinion of holding cash in reserve (as Freeus has suggested), and if you do, what percentage would you hold out for buying opportunities like the other day. Holding cash presupposes you can time the top (to generate the cash) and the bottom (to buy in again). Most traders operate on this principal. I have proven several times that I have no skill at trading, as have several other elders on the thread, so I don't attempt it. My concern is that, with the constant stream of good news from our Gorillas, I would be on the sidelines during a critical period, and miss something unique, like the 12/29/99 156 point gain in qcom. As a result, I remain fully invested at all times. jmho uf

To: npiwovar who wrote (22392)	4/7/2000 12:11:00 AM
From: Bruce Brown	Read Replies (1) \| Respond to of 54805

Here's a short on Qualcomm admitting their mistake and taking their losses: streetadvisor.com Neil, I know you asked UF, but if you look back to the autumn of 1998 and autumn of 1997 - the recent 'action' is quite similar when external forces caused a lot of people to sell in a panic and leave a lot of money on the table. Ideally, it would be nice to be able to have some cash or use some margin to take advantage of such 'snap back to reality' scenarios when they do present themselves. However, even if you don't - in the long run things should work out just fine and dandy. In regards to your question, I don't see it as a 'foolish attempt to time the market' as you mentioned. Especially if by the time you have completed your research on an investment you see that it is trading way above its moving average and valuations seem extended to the point that they are on the stretch, why not let a little cash sit around using patience and waiting for 'mouth watering' days as you so aptly said? It may or may not end up 'saving' you money depending on how long that patience has to be extended while waiting for the 'event' to happen. Take a look at this chart of 7 stocks which have been discussed on this board: siliconinvestor.com You could make the argument: "Big deal. Through all of that muck, we're back to the prices of early February or in Elon's case - mid January. Is that maximum pain? What about the mega market cap stocks we discuss: siliconinvestor.com Going back a month or two - it's not such a 'big deal'. Hence, we will continue to get people that point that out and plenty of calls for more testing of the lows, etc... . Yet, what will the chart look like one year, two years, three years, four years, five years and out from here? Now, let's go back and catch the 1997 and 1998 blood letting in a chart of those same big 7: siliconinvestor.com Certainly not a portfolio showing returns to be complaining about in spite of the dips, is it? Well, okay - SAP was included to show maximum smiles and to fill in the blank spot. <ggg> As has been said in a few of the previous messages, provided you have your investments paid for and don't need the money for several years - simply ride it out and look forward to the day you can look back and say "I'm glad I didn't panic". Believe me, there will be many more of those days which will transport us out of our comfort zones. It's quite possible and natural that some testing will occur in the next few weeks just as it did in 1997 and 1998 following the panic. Keep in mind, investors holding a gorilla like Cisco since 1990 are not showing a 178,000+ % return because they hit the panic button along the way. Nor are they sitting on a 11,000+ % return from Gorilla Oracle since only 1990 (chosen to parallel Cisco's IPO) by hitting the panic button. How about a royalty play in the PC value chain - Dell is sitting on 62,000+ % return since 1990. Dare I point out a couple of Godzillas? Maturing Godzilla AOL investors have a 54,000+ % return since 1992 and young Godzilla eBay investors have a 1,100+ % return since the IPO in 1998. I hate to always list numbers from the SI charts, but until I see qualified evidence that timing these stocks has produced consistently better returns, I'll stick with the LTB&H. I'm not saying timing can't be done because I know many successful market timers and mechanical investors that simply use the data and charts to buy and sell. Yet, I've never seen concrete returns that beat or even match returns like the stocks we discuss on this board. You certainly have to find your comfort zone in terms of holding cash. That balance is as unique as your comfort zone. Be it a negative amount (margin), 0%, 5%, 10%, 20%, 30% or more. I'm sitting on 32% cash because my wife wants her comfort zone met. That's a new step for us as we have more or less been 100% invested in equities for the past 15 years. In spite of mistakes I have made along the way, the slight dip in 1987, the Gulf War bear market, interest rates going up and interest rates going down, 1997 and 1998 "Asian/Russian/hedge fund/tulip mania/SELL!/BUY!/you define it" market pressures - the LTB&H method through it all has pretty much been panning out enough to make us firm believers. Once again. You've got to find your comfort zone. BB

To: npiwovar who wrote (22392)	4/7/2000 1:10:00 AM
From: TigerPaw	Respond to of 54805

At the risk of giving mixed messages, I use margin for bargain hunting. I stay pretty much fully invested. If I feel nervous I may sell whatever seems to be making me nervous, but usually fully invested. When there is a big big crash I will bargain hunt for quality on margin, but then as things recover sell off. What to sell? I don't know! I try to only buy things I want to own so I don't want to sell any of it, but Sell something! try to guess what rebounded too quickly or out of line. In the end you will have a little more stock and no margin. If you don't have much money it doesn't matter, with cheap commissions you can be buying 5 or 10 shares at a time. This correction I bargain hunted too early, some bargains went down another $60. My goal is to not exceed 10% margin, my comfort level kept me to 6%, I plan to have all margin payed off by June (which is somewhat arbitrary but it is important to have a goal and stick to it). I'll pay off earlier on any rally. As a side point, I often pay off with a completely different stock than the ones I bargain hunted for, because I can get a capital gain instead of an ordinary tax, but the rule is the same. Pay it off! I misplayed this correction very badly, but I suspect I will be even or ahead within a month. TP

To: npiwovar who wrote (22392)	4/7/2000 10:09:00 PM
From: Fred Davis	Read Replies (5) \| Respond to of 54805

I apologize to Uncle Frank and the thread elders for my somewhat off topic discussion to which I have pondered since finding this great thread back in November of last year. I have been a faithful lurker here and have only posted on very rare occasions. I'm sure many of you elders are wondering and the answer is "yes" I've read the manual and find myself having to make reference to the FM often as I attempt to follow along. Since I manage a very small portfolio, owning a basket of both Kings and Gorillas, I have often wondered how many of the elders here managed such a small amount of capital in their earlier G&K investment days. My problem is determining how many G&K's to hold at any given time. I am comfortable holding only a few positions from a risk adverse position but find myself having a desire to own more companies which spreads my "small fry" holdings out to owning a very small position in each of these great companies. I find it very difficult to narrow my selections down. To sum it up, "too many companies with too little money". I'm sure the reasonable answer to my dilemma would be to pick 5 to 10 G&K positions and remain patient, which I'm doing for the most part but continue to struggle with the number of holdings and percentages within my portfolio. A special thanks to all the elders for keeping us focused on GG gaming. It's very easy to get off the beaten path and get into swing trading, making our broker very happy but doing little to build wealth. Would sincerely like to hear from anyone via PM if necessary. Thanks again, Fred