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.

Non-Tech : Invest / LTD -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (13783)	8/15/2000 4:35:16 PM
From: The Ox	Read Replies (1) \| Respond to of 14427

While there is no "rule of thumb" to use, I've been considering reducing the maximum market cap allowed for the model portfolio. While's it's very possible that a 2 billion dollar company could grow into a 20 billion dollar company in a couple of years, the chance that a .2 billion dollar company will turn into a 2 billion one seems much greater. Exponential growth is much easier with a smaller starting point. For a good example, look at VTSS vs RFMD over the past 2 years. RFMD now has a $5+ billion mkt cap, up from 300MM 2 years ago (if my memory serves me). VTSS has gone from $4 to $13 (EDIT: billion) during the same period. RFMD's revenues grew from $45MM to $288MM in 2 years while VTSS's revenues grew about 55% per year during the same period. Maybe I'm not selecting the best companies for comparison but its the point I'm trying to get across. Of course, the vertical market that each company is in may be more important than the mkt cap starting point, so we can override the restriction if a company has an exceptional market dynamic.