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

To: Mike Buckley who wrote (46121)	9/3/2001 2:53:22 AM
From: hueyone	Read Replies (2) \| Respond to of 54805

Maybe I'm naive, but I wouldn't credit or discredit Moore & Gang so much as to believe their book so vastly influenced perceptions of investors. Mike: Perhaps some investors mistakenly lowered their guard after reading these four lines from the manual's introduction: Far from being independently wealthy, we expect you to have modest capital at the outset and to be deeply concerned about not losing it. As a result, we are going to define an investment strategy that has significant upside potential but that is, at its heart, inherently conservative. That is to our mind the real purpose of the gorilla game---to help private investors participate in the rewards of of high-tech stock gains while standing clear of the market's unnerving volatility. To the degree that this notion speaks to your deepest concerns and needs, you are directly in our sights. In fairness to the authors, I assume these lines first appeared in the introduction of the original manual in 1998---well before the bubble and its attendant risk had arrived in full force. Nevertheless, Paul Johnson (a Columbia finance professor no less), continued to publicly display an unbelievable disregard for risk of capital loss well in to the peak of the bubble.

To: Mike Buckley who wrote (46121)	9/3/2001 2:44:25 PM
From: Stock Farmer	Read Replies (5) \| Respond to of 54805

Mike - When I said "in the back of everyone's mind was the axiom that everyone else was under-valuing these stocks", I really meant everyone thought they were getting a bargain. One must believe that a stock is "undervalued" against alternatives to purchase it with expectation of gain. Test this hypothesis with the contrapositive. Raise your hands if you believed as you bought that you were paying more than you thought you would get selling it later. And yet you (generically, not personally) bought and paid that much nevertheless? Hmmm.. Way back when everyone was exclaiming how expensive their stocks were. Wasn't there still an expectation of long term gain in excess of alternative investments? In which case, the stocks were viewed as undervalued. And if not, then well, it means that folks playing the gorilla game holding stocks they knew were over valued were behaving irrationally. Because if they had been behaving rationally they would have sold the stocks when overvalued and repurchased them later at fair value or less. Applying a test of beliefs not by espoused theory, but by action. As to whether Moore's book influenced the market? Well, of course it's hard to distinguish cause, effect and coincidence. But given the sickening degree to which the term "gorilla" was being tossed around, I think the influence was significant. Not in its pure form as practiced by the elite, I grant you, but in numerous and remarkable derivative forms. Forgive me if I'm wrong, but I thought it was on the bestseller list for a while too. John