Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: freeus who wrote (29409)	8/4/2000 4:20:04 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

won't be able to predict which stock in your portfolio is going to be the big winner It sure is if one insists on loading up on Shiny Pebbles in the hope of getting The Big Ride. It is a whole lot less true investing in mature gorillas ... i.e., they all will be winners over time!

To: freeus who wrote (29409)	8/4/2000 4:32:09 PM
From: TigerPaw	Read Replies (1) \| Respond to of 54805

able to predict which stock in your portfolio is going to be the big winner If you (or I) could guess the big winner, then so could others and the price would be run up until it wasn't such a winner. Never underestimate the amount of luck involved in snagging a great gain. Still you can certainly increase the chance of luck being on your side either by choosing very strong candidates, or the basket approach to potential gorillas. TP

To: freeus who wrote (29409)	8/4/2000 5:41:36 PM
From: Mike Buckley	Respond to of 54805

most of the time you won't be able to predict which stock in your portfolio is going to be the big winner. Is this true do you think? In the short term, it's so very, very true. --Mike Buckley

To: freeus who wrote (29409)	8/4/2000 5:56:42 PM
From: willkm3	Respond to of 54805

re: most of the time you won't be able to predict which stock in your portfolio is going to be the big winner The key word here is BIG. As TMH said, the bonafide silverbacks should give excellent risk adjusted returns over time. But you can't know for certain which shiny pebble or young gorilla will be the BIG winner. ie,CSCO, INTC, MSFT. This is the reason I spread the risk around. No more than 10% to 15% in any one stock initially. If one goes on a run I will let it run, even if it gets to be an even larger % of the whole. I'm not saying I would never peel off a little and move it to the latest up and coming primate but for the most part you must let your profitable trades run & run & run. The reason is that most stocks will simply not become the next CSCO and only in hindsight can you know which is which. Consider the following example: Investor A: Buys 10 G&K Candidates (equal amounts), Holds them for 5 years. 3 become silverbacks and rise 1000% each. 7 turn out to be various primates and royalty and rise 100% each. (Investor A has a 370% gain) Investor B: Picks 1 of the 10 G&K Candidate, Holds for 5 years. It is becomes one of the silverbacks mentioned above and gains 1000%. (Investor B has a 1000% gain) Which would you rather be? B of course, everyone wants to do what investor B has done. However, that's the wrong answer. The odds heavily favor investor A. Investor B has a 7 in 10 chance of picking the wrong stock and getting 100%. Its nice to dream, but when the money is on the line you must play the odds. Investor A only has to be right on 30% of his decsisions. Investor B must be right on 100% of his. I would choose a strategy that is right 30% of the time with great returns, over a strategy that is right 70% of the time with fantastic returns. Why? Because results will be mean reverting. During some period the strategy that wins 30% of the time will win 50% or 60% of the time and you will get fantastic returns. If the strategy that wins 70% of the time drops to 40% or 50% winners, you will be in trouble. The way to make money is not being right often. It is in being right BIG a few times. The BIG outlier winners are a must in this game. That is why I like the GG so much. It is statistically sound in its premise that you should focus on and gravitate to the Gorilla as it emerges and leave the others behind. Regards, willkm3

To: freeus who wrote (29409)	8/5/2000 12:09:26 AM
From: tekboy	Read Replies (1) \| Respond to of 54805

re most of the time you won't be able to predict which stock in your portfolio is going to be the big winner Is this true do you think? in my limited but intense experience, the answer is "absolutely." For example, within the past year there have been stretches of weeks and even months at a time when each of the following has been by far the best performer in my portfolio: QCOM, JDSU, NTAP, SEBL, ITWO, GMST, and CREE. Sometimes these runs are predictable (say, into earnings), sometimes not; sometimes they're justified (say, good news), sometimes not; sometimes they take the stock to apparently permanent new levels, sometimes not. Maybe someday I'll figure out why these short-term movements happen as and when they do; maybe I won't. Certainly I haven't been able to so far. Nor have any of the supposedly smart guy experienced thread elders I've occasionally cajoled into offering public or private opinions, which accounts for my pathetic options trading results... :0( tekboy/Ares@alwaysblametheotherguy.com