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

To: Jacob Snyder who wrote (40491)	3/16/2001 6:45:58 PM
From: EnricoPalazzo	Read Replies (1) \| Respond to of 54805

Darn... you caught it. You ruined my joke at the bottom (note to reader: this was initially posted on the NTAP thread) Jacob, I think we agree more than we disagree. Both of our approaches seem reasonable. At bottom, you have more faith in your ability to pick an entry point than I have in mine (although, to be fair, I didn't get in until the 40's). Hopefully, I can develop that skill at some point, as I agree it's important. As a general rule, if Buffett thinks something is important (as he does with choosing your entry point), so do I. Some minor points, though: As I posted earlier, I see WAFL as a superior product (quality and pricing), but not a bte I basically agree, which is why I'm not sure where to put it in the Gorilla Game. It seems that Kings are generally about ruthlessly efficient producers of commodities (e.g. Compaq), and Gorillas are about having proprietary control of an open architecture. I view NTAP as a company with a great, highly differentiated, high-margin solution, with the potential to develop proprietary control of an open architecture maybe, but they don't seem to have it. (I'll also admit that I don't really understand NTAP's technology near as well as some who'd disagree with me here). I guess I think NTAP has the potential to be in ten years what EMC is now, but in a much bigger market--a provider of great storage solutions. Paying far to much for a good company's stock, is just as bad a decision as picking the wrong company. I know, the Good Book says the exact opposite, so maybe I'm not a Gorilla Investor. I think you're overstating what the manual says. The manual says (and many GG'ers dispute this) that Gorillas are never overvalued. It doesn't say that buying at great prices isn't better than buying at good prices, it just says that the prices are always good. CostCo always has low prices, but they still have sales. The other problem I have, is how everyone is saying, "NTAP's boxes are more cost-effective than EMC's, so NTAP will gain market share". That's like saying, "Dell's PC is more cost-effective than Compaq's". If NTAP is going to win market share based on competing on price, then I want to avoid the entire sector. I hope you know that I like and respect you, but you're flat out wrong in this regard. Ignoring things like consumer goods where rationality goes out the window, cost-effectiveness is all that matters. It is the be-all and end-all of competitive advantage. Maybe you're thinking "low-cost producer", which is about offering commodity products at a lower price, due to some efficiency. But it can also mean "differentiated producer", which is about offering a product that your customers value a lot more than the standard product, but doesn't cost you a lot more to make. If you want to maximize bang/buck, you can increase bang or decrease buck (or both, like MSFT & INTC). Think of the PC architecture vs. the Mainframe architecture. The PC architecture is vastly more cost-effective, which is why Microsoft & Intel (differentiators) are rich, and also why Dell & Compaq (low-cost producers) are too. You should really sit back and marvel at how cheap Windows and Pentium III's are. I'm responding on this thread, rather than the NTAP thread, as I find that thread useless. ROTFL... Better luck next time. JS@andipissedthemallofftoo.com you have now.