Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: stockman_scott who wrote (45620)	8/19/2001 8:39:47 AM
From: paul_philp	Read Replies (2) \| Respond to of 54805

Interesting quote from the article. Geoff Moore has it right and Warren Buffet is wrong? Must be tough selling investing magazines these days. Paul "We need experts to devise new ways of looking at our portfolios. This should include a set of analytics to help us map where a company stands in its life cycle and how its prospects intersect with investors' upcoming needs (sending kids to college, funding a business, buying a second home). Is a company in its infancy? Its adolescence? Or is it tottering toward corporate geezerhood? (These indexes and metrics would complement earnings multiples, debt-equity ratios, and other traditional measures.) Analysts also need to work harder to understand the process by which businesses age, incorporating the work of such thinkers as Ichak Adizes, author of Corporate Life Cycles: How and Why Corporations Grow and Die and What to Do About It. There are indications that the idea behind right-term investing is gaining traction. A best-selling book called The Gorilla Game: Picking Winners in High Technology makes the argument that only one or two "gorillas" will end up dominating each technology segment. Authors Geoffrey Moore, Paul Johnson, and Tom Kippola advise investors to start with a diverse portfolio and drop the weaker primates until they're holding only the gorillas."

To: stockman_scott who wrote (45620)	8/20/2001 11:24:17 AM
From: Knight	Read Replies (1) \| Respond to of 54805

Re: Buy-and-Hold Investing May be Dangerous to Your Portfolio I think this article mischaracterizes Buffet's methodology. I'd say it's more accurate to characterize Buffet as a value investor. Because Mr. Buffet performs due diligence on the companies he acquires, is apparently very good at estimating their value based on discounted cash flow, etc., and performs his analysis based upon long-term trends, his investments tend to be long-term holds--and he expects them to be long-term holds. However, since Mr. Buffet pays close attention to fundamentals, valuation, etc. for his holdings, he would be very unlikely to stubbornly cling to an investment that has become overvalued, or whose long-term prospects have appreciably changed. If "long-term buy and hold" == "buy a great company and forget about it," I think the article's assessment of that style of investing is correct; however, by implicitly defining it that way I think the author created a straw man. Most investors who would call their style "long term buy and hold" would strongly protest that "long term buy and hold" != "buy a great company and forget about it"; rather, they would say that successful long-term buy and hold investing requires diligent tracking of your investments WRT fundamentals, valuation, and trends. I think the Gorilla Gaming methodology that has evolved from Moore's books and from the discourse on the SI and Fool threads can be characteristized simplistically as: A method of technology investing which is based on "Buffetology", but applied with added insights about characteristics (related to adoption life cycle, barriers to entry, competitive advantage, etc.) that are unique to technology markets.