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

To: hueyone who wrote (39234)	2/14/2001 10:21:47 AM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

hueyone, can we permanently dismiss the untenable notion that anytime is a good time to buy a gorilla? Thank you! We need more people speaking to that issue. Personally, I don't believe that gorillas have "tended to be undervalued" the entire year I have been reading this thread. Agreed. But I do believe they probably have been less over valued than the vast majority of companies with far less of a sustainable, competitive advantage. For the people who believe that Gorillas are undervalued today, I surely hope they realize that their stocks will get trounced even more if indeed we do have a recession this year or next year. (I'm defining a recession as a minimum of two consecutive quarters of negative economic growth.) As Frank or Bruce pointed out awhile back, if we do have a recession, it's likely that the stocks will be at their lows approximately when the recession begins and will move upward long before the recession ends. In hindsight, do you know anyone who has underestimated the long term earnings potential of their gorilla in the last year? I think that's impossible to answer today because the truth won't be revealed until far into the future. I could ask if I know anyone who has overestimated the potential and it would be equally unanswerable today for the same reason. You mentioned that you're upset for having overpaid for NTAP. Not to twist the knife in the wound, but it might be helpful if you would share with us the valuation process (if any) you used to determine whether or not NTAP was or is fairly valued. As my personal example, I clearly overpaid for SanDisk when I bought it in July at almost three times the current price. I determined at the time that though the stock's relative valuation was a lot lower than at previous times when the fundamentals were weaker, the stock was still valued higher than I preferred. Countering that was the notion that it wasn't unreasonably valued considering the potentail for gorillahood of an enabling technology and the potential for multiple tornados one of which was already in progress. If all of that comes to fruition, I believed (and still do) that my entry price would eventually result in a handsome, long-term gain years down the road. Because I waited until the first tornado formed, I still feel that I minimized my long-term risk. Only time will tell. --Mike Buckley

To: hueyone who wrote (39234)	2/14/2001 10:39:23 AM
From: DownSouth	Read Replies (1) \| Respond to of 54805

do you know anyone who has underestimated the long term earnings potential of their gorilla in the last year? Huey, that's an oxymoron--"long term" and "in the last year". The gorilla view is much longer than 1 or 2 years.

To: hueyone who wrote (39234)	2/14/2001 11:52:15 AM
From: Uncle Frank	Read Replies (3) \| Respond to of 54805

>> can we permanently dismiss the untenable notion that anytime is a good time to buy a gorilla? Personally I don't have enough data to come to that conclusion, Huey. That belief, and indeed all of the Gorilla Game theory, is based on a long holding period, which would make your conclusion, following a nasdaq correction of less than one year, a rush to judgement. Taking a longer measuring stick, let's say a modest 3 year holding period, and looking at the 2001 GKI components, the theory would still appear to have some merit. 1/13/98* 1/13/01 Return BRCD 5.66 53.44 845% CSCO 16.17 28.50 76% EMC 16.75 55.31 230% INTC 25.94 32.44 25% ITWO 5.77 38.25 563% JDSU 6.41 38.50 501% MSFT 55.00 58.19 6% NTAP 7.94 39.69 400% ORCL 5.53 22.56 308% QCOM 6.86 80.50 1074% SEBL 6.34 55.94 782% SUNW 7.52 25.13 234% * Brocade price on 5/25/99 Disclaimer: I a very stubborn permabull Gorilla Gamer. uf

To: hueyone who wrote (39234)	2/14/2001 12:38:53 PM
From: Pirah Naman	Respond to of 54805

can we permanently dismiss the untenable notion that anytime is a good time to buy a gorilla? I never subscribed to that perspective, so I will back you on this. Stocks that are priced far in excess of their discounted future earnings (preferably free cash flows) eventually come back to earth. Sing it! do you know anyone who has underestimated the long term earnings potential of their gorilla I suspect that most do not estimate the future free cash flows at all. - Pirah

To: hueyone who wrote (39234)	2/15/2001 10:21:49 PM
From: StockHawk	Read Replies (3) \| Respond to of 54805

>>can we permanently dismiss the untenable notion that anytime is a good time to buy a gorilla?<< That line is one I was never comfortable with as it too much of an absolute. Also, I've always looked fondly at timing attempts despite their disdain here. A year ago statements such as the above were easy to accept as recent history proved them true. Now recent history makes such statements appear wrong-headed. Drawing investment conclusions is very different from drawing scientific conclusions. In science if an experiment can be replicated it seen as proof. But with investing, just because a thing works five times in a row does not mean it will work the next time, or even that it will ever work again. Things change. However, before dismissing the "anytime theory" it might be worthwhile to recall that study of the hypothetical investor called Ms. Unlucky. It seems that Ms. Unlucky would invest just once per year, and always at the exact moment when the market reached its annual high. The surprising result is that after 20 years Ms. Unlucky turns out to be rich, as the compounding effect of the market, and the long term upward movements of stocks makes up for her extremely poor timing. StockHawk