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

To: Mike Buckley who wrote (24700)	5/13/2000 11:22:00 PM
From: tripperd2	Respond to of 54805

Nice discussion guys. Tekboy you certainly are not the only one thinking along those lines. I certainly don't have Mike's experience or understanding of valuation, but I wholeheartedly agree with him. The only reason I can dabble with G&K's with a reasonable amt of money is from holding Intc and then Cisco for 9 years. When you two started this discussion I picked up my copy of A Random Walk Down Wallstreet and found a few snippets to add to the discussion. Malkiel quotes John Bogle chairman of Vanguard Securities "In 30 years in this business, I do not know anybody who knows anybody who has done it successfully and consistently. Indeed, my impression is that trying to do market timing is likely, not only not to add value to your investment program, but to be counterproductive." Malkiel then goes on to note that during nearly every market cycle from 1970 through 1988 mutual fund managers were incorrect in their cash allocations. I think I will just stay fully invested in Gorillas and Kings. trip@ifitsgoodenoughforbogleitsgoodenoughforme.org

To: Mike Buckley who wrote (24700)	5/13/2000 11:24:00 PM
From: tekboy	Read Replies (2) \| Respond to of 54805

ok, going to a later show... last word, promise. :0) <<What I do quibble with is the notion that individual investors don't have access to the information or the ability to use the information to outperform the index funds or the other mutual funds.>> I'd be very eager to see any non-anecdotal evidence you could present to back up the quibble. The issue here isn't individual vs. professional investors, but rather whether anybody can reliably beat the averages on a long-term, risk-adjusted basis. Extraordinarily few mutual fund managers have been able to do so, despite tons of information, lots of effort, and huge incentives. This is the chief empirical evidence cited to support efficient market theory and index-fund investing; those interested should check out Burton Malkiel's A Random Walk Down Wall Street (Norton, 1999) or John Bogle's Common Sense on Mutual Funds (John Wiley & Sons, 1999). The best evidence I've seen to counter that relates to value investing rather than growth investing, and can be found in Warren Buffett's "The Superinvestors of Graham-and-Doddsville," reprinted in current editions of Benjamin Graham's The Intelligent Investor. Anybody who is buying individual stocks as more than a gamble, it seems to me, should be able to explain why he or she is likely to do better than the pros. (Hint: Good answers might highlight things like smaller dollar amounts, long-term investing horizons, lack of peer pressure, greater discipline, having read the manual, etc.) My only point is that I see little conceptual difference between the arrogance behind trying stock-picking and the arrogance behind trying market-timing. I accept that some very smart people I respect greatly feel they can do one and not the other, but I'm still trying to figure out (taxes aside!!!) why that should be so. tekboy/Ares@24hourthreadjailforexcessiveposting.org