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

To: hueyone who wrote (40187)	3/10/2001 11:40:56 AM
From: tekboy	Read Replies (2) \| Respond to of 54805

Yet I find the tendency to dismiss people's valuation concerns with the statements that 1. gorillas are almost always undervalued and 2. that concern for valuation is somehow related to the general failure of market timing to be extremely misleading and disconcerting statements. I just wish the thread leadership, rather than tending to dismiss valuation concerns, would acknowledge the extreme risk in buying a gorilla at any time at any price without regard to valuation. (JMHO) bit of a late hit, huey, since the charge was more valid a year ago than it has been recently, and the negative consequences of that mistake (to the extent that it was one) have been pretty plain for all to see, and feel. Moreover, I don't think it's true that thread leadership has conflated market timing with valuation. What has been said, it seems to me, is that it is difficult to translate the qualities that distinguish Gorillas from other companies into the sort of traditional, highly quantified valuation metrics that valuation junkies usually rely on. This has meant that even some of the most serious students of valuation around here--Merlin and Lyre, for example--have found it difficult to use their valuation skills to pick good entry and exit points consistently. Anyway, I think the best way to move forward on the subject is for those who do think valuation matters, and who have metrics that they believe are sensible and can legitimately be blended into gorilla gaming, and who have used their skills to move in and out successfully in the past (as opposed to simply buying in when they had the money and then riding the tiger from then on), to show us how it's done. Although his tone can be a bit clinical for my taste, for example, I think Jacob Snyder has been a good example of someone who has always been open about his thought processes in this area and the decisions they have led to, and thus contributed to general edification. Merlin has often tried to apply his valuation thoughts to individual stocks in public as well. I understand why folks like Pirah prefer to teach fishing rather than proffer fish, but it's most helpful for the thread if valuation junkies show their work for all to see, and show how it can improve their investing results over time. All of us would like to make money, obviously, and demonstrations of a better mousetrap for doing so are always appreciated. tekboy/Ares@innumerate.pov

To: hueyone who wrote (40187)	3/10/2001 11:48:43 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

huey, I just wish the thread leadership, rather than tending to dismiss valuation concerns, would acknowledge the extreme risk in buying a gorilla at any time at any price without regard to valuation. Ahem. (Cough. Cough.) At the very height of the Naz (though we didn't pretend to know that it would be the high), my verbal presentation to the group in San Diego was about valuation. We made video tapes available. We published a transcript in the thread. Who not only invited me but also insisted that I make a presentation when I had initially declined to attend? Lindy and Frank, of course. I'd argue that a lot of the people in the thread are really tired of many of our discussions of valuation. The most recent one took place no more than a week ago and involved several very informed people. Though Frank's greatest strength may not be the stuff of valuation, he has consistently encouraged and welcomed discussion of it. --Mike Buckley

To: hueyone who wrote (40187)	3/10/2001 4:32:51 PM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

>> I have noticed that when we get into this discussion, your statements often seem to tie investors' concern for valuations to the general failure of market timing. Guilty as charged, Huey, but my primary focus has always been on technology, talc, and cap. Those are the areas I feel strongest in based on my education and professional experiences. I am always interested in valuation models that might favorably impact the risk/reward ratio, but don't look for me to develop any. >> But <Buffett> has at least one more extremely important investment criteria that Gorilla gaming and this thread fail to give its due---and that is to buy companies at a discount to their intrinsic value, to buy companies when their stock prices have a margin of safety. Does this last criteria make him a market timer? No, because he doesn't try to sell at the peak. His approach is to locate entry points in great companies based on valuation, and then hold on for the long term, but keep in mind that his model doesn't include tech. My approach is to locate entry points in great companies based on the position of its products in the talc and then hang on for the long term. It plays to my skill set. >> I just wish the thread leadership, rather than tending to dismiss valuation concerns, would acknowledge the extreme risk in buying a gorilla at any time at any price without regard to valuation. Then your wish has come true, because you just did. This isn't a thread of sheep following a shepherd or people looking for a guru. It's an investing smorgas board where we can load our plates with insights dished out by any of our active contributors. You've been a long term participant, and as such are every bit as much of a thread leader as Merlin, Lindy Bill, Galahad, Apollo, Thucydidies, Plutus, Ares, Lyre, or Chartmeister. I'm pleased that you've expressed your interest in valuation, and hope that you continue to lead a discussion in that direction. uf