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

To: Joshua Corbin who wrote (36813)	12/19/2000 6:33:48 PM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

Joshua, I never understood why the Gartners made such a big deal of the strategy. My assumption is that the typical Fool newbie has about $5K in a brokerage account or a $2K IRA as a starting kitty. Even if you could beat the market with F4, you'd lose on commissions and taxes. Not true. That's because, on average, only two of the four stocks traded each year. If I remember correctly, the Fool recommended a benchmark of keeping commissions to about 2% of the total portfolio value, meaning four trades (required to change two stock positions) at $10 each kept the $2000 investor within the benchmark. For a $5000 investor, commissions would average less than 1% of the portfolio value. Anyway, there's a guy over there named Datasnooper who made refuting the F4 into a personal crusade I hope he appreciates that the Motley Fool is one of the few, if not the only, organization that promotes viable feedback on a daily basis about their portfolios. And it's the only company that has real-money portfolios reported with commissions included and with decisions to buy or sell a stock in the portfolio made public before the transaction is made. We need more investors crusading for such models of public disclosure and accurate accounting. Part of the problem was that TMF borrowed the mutual fund's trick of boasting high performance over statistically insignificant time periods. Boasting? Please provide even the smallest evidence of that. I read the Rule Breaker report regularly and I think just the opposite has been happening over the last six plus years. They've been saying that the period of time the portfolio has been in existence has been relatively short. And comparing that portfolio with mutual funds "tricks" is unfounded. A mutual fund's business is to attract investors to put the hard-earned dollars into the fund. The Rule Breaker portfolio does no such thing. In fact, it encourages people NOT to invest in the same stocks it invests in. And perhaps most important, David Gardner (by the way, it's Gardner, not Gartner) has repeatedly and consistently written over the last six years that he suspects the Rule-Breaker style of investing is not for most people because most people don't want to contend with the extreme volatility that comes with it. Joshua, I think you're very way off base in your comments. Prove me wrong. --Mike Buckley

To: Joshua Corbin who wrote (36813)	12/19/2000 7:04:59 PM
From: Bruce Brown	Read Replies (1) \| Respond to of 54805

The Rule Breaker portfolio is the center of the ruckus. Part of the problem was that TMF borrowed the mutual fund's trick of boasting high performance over statistically insignificant time periods. boards.fool.com It reminds me of gang mentality of picking on somebody that's down and out at the moment. Spitting. Kicking. Punching. Ruthless. Plenty of that going on at the moment throughout the Internet. Pick a technology message board from Cisco to Network Appliance to Qualcomm. Plenty of jabs at long term investing. Plenty of people letting others know how 'stupid' they were to hold through it all - at least in the case of technology stocks. I guess there's plenty of Christmas spirit to go around. Where were we 2 years ago and where will be two years from today? At the moment, we're simply at the midpoint between those two points. In spite of that, David Gardner is using a longer term strategy which has the Rule Breaker portfolio up on an annualized basis of 40% per year since 1994. Compare that annual rate to the annual rates of the S&P being up 18% (19% with dividends) and the Nasdaq about 22% since 1994. In terms of returns to date since each were purchased they have 4 winners: AOL, Amazon, Amgen and Starbucks along with 3 losers (the most recent additions to the portfolio with losses of 5% to 35%): Applera-Celera, Human Genome and eBay. Regardless, it is simply a public exercise which one can view as it unfolds or one can choose to ignore. I'm sure we could all agree on a different portfolio of companies if each of us were in charge of a public portfolio exercise such as the Rule Breaker. If so, it would require we do all the research, announce a purchase plan or a sale plan for each equity, review the quarterly reports, have periodic updates and newsworthy items relating to the companies in the portfolio and track and monitor the performance of each equity. All of this would be displayed in public and each decision would be open to public discussion. In theory, it's a nice seminar type of exercise for investors to learn how to find the companies, research them, track them and see what goes into building and maintaining a portfolio. Hey, isn't that what we do here....... BB