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

To: Uncle Frank who wrote (30723)	8/29/2000 7:58:05 PM
From: Thomas Mercer-Hursh	Read Replies (2) \| Respond to of 54805

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. With all due humility in the presence of the founder, I don't that it is that they are not quantifiable, but rather that we haven't yet developed any very good tools for creating metrics for them. In the graphs of value relative to cost which Moore uses to illustrate GAP and CAP, the graph relates to real dollars. In a hindsight environment, we could probably create some reasonable estimates of the lines and thus of the actual dollars represented by the area under the graph. Looking forward, of course, is that much harder. But, it doesn't stop us from making projections about future revenues and earnings, does it. It is just that with Gorillas, in order to make a reasonably complete estimate, one is projecting out sufficiently far into the future that no estimate based on current and past numbers is very believable, doubly so because tornados create dramatically non-linear change, and triply so because any gorilla that is not a one-trick pony will be piling GAP and CAP on GAP and GAP, tornado on tornado. Hard? Yes. Precisely believable? No. Involves a lot of judgment and interpetation? Yes. But, quantifiable? Ultimately, yes, just not with precision.