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

To: alburk who wrote (30713)	8/29/2000 7:37:23 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

>> With all due respect I disagree. Well, OK, as long as you put it that way <gg>. >> GAP and CAP are the tools/concepts that we use to assess value and we agree that gorillas have superior GAP's and CAP's. But they are not infinite. But since they are not quantifiable, the best we can use them for is a subjective valuation based on our perception of the company's business prospects. >> The Gorilla Game is the most appealing approach to investing that I have come across. Me, too. >> But valuation matters and IMHO the authors should address this issue in the next edition. Somehow I don't think that's not their forte. Fortunately, we have our own Valuation Team, coached by Merlin, which has done a good job at keeping us aware of bean related issues. uf

To: alburk who wrote (30713)	8/30/2000 11:29:14 AM
From: StockHawk	Read Replies (1) \| Respond to of 54805

We are in unchartered territory using a system that was back tested in an era that was much more "valuation friendly"...The Gorilla Game is the most appealing approach to investing that I have come across. But valuation matters and IMHO the authors should address this issue in the next edition. Andrew, I think you are hitting on an important issue here. A while back I read an essay written by a historian. He was being critical of historical texts about recent events, such as a book on the Gulf War published a few weeks after the war ended. He believed that such quick analysis had to be inaccurate. Valid insights need time to develop. After- effects and important consequences need time to unfold. In a similar vein, it is very difficult to understand, and put in perspective, what is happening in the stock market while it is happening. For example, one of the reasons the Gorilla Game was revised was because of the incredible growth in the value of Internet stocks. The authors looked for a rational way to play that game and came up with the Godzilla concept. The concept made abundant sense, but their timing was perhaps premature. True, people who invested in Godzillas such as AMZN, EBAY or YHOO missed the carnage that befell most dot coms, but even these stocks have been poor investment choices, currently sitting not much higher than where they were in Dec. 1998. The point being, we are participating in a dynamically changing market where the pace of change is accelerating. We all know that. What we must also acknowledge is that the validity of back testing is under pressure in such an environment. Books about investing in the current stock market, even the very best of them, are constrained by the fact that they are written at a single point in time. They adapt and change, through revisions, slowly and with time-lags. That is what makes a forum like this one so important. Intelligent investors, employing a common framework, examine and re-examine companies with a critical eye as events, markets and competitive situations unfold. I am indebted to the authors of the Gorilla Game and I will certainly purchase the next edition as soon as it is published, but for the best source of up-to-date Gorilla analysis, this is the place to be. StockHawk

To: alburk who wrote (30713)	8/30/2000 7:51:38 PM
From: mauser96	Respond to of 54805

Valuation matters, but less in the GG than in other methodologies. You will grow a lot of gray hair waiting for most GG stocks to seem cheap. About the only time I've seen it happen is during a bear market panic, when the atmosphere of impending doom makes it hard to press the buy button. These are mostly such high quality issues that stock specific collapses outside of the general or tech market are uncommon. Even when they do decline substantially, they often still seem expensive by conventional valuation methods.