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

To: RobertHChaney who wrote (47374)	10/2/2001 2:30:01 AM
From: kumar	Read Replies (2) \| Respond to of 54805

How do we know for sure that the GG is market agnostic? I would very much appreciate it if u could point me to a line or paragragh in the manual, that explicitly says "its not market agnostic" it would be a learning experience for me. cheers, kumar

To: RobertHChaney who wrote (47374)	10/2/2001 4:11:28 AM
From: Bruce Brown	Respond to of 54805

The original book was released in March of 98. So, it has only been tested under a 2 year mega-bull market and a 1 1/2 year (so far) bear market. Certainly, the technology/company movement through Chasm, Bowling Alley and Tornados was very active during the first 2 years. How about since then? Probably about zero certain Tornados. And, if the current bear market continues for a while, can we really expect many of the potential Tornados that have been discussed on this board, to actually happen? I basically struggle to see how many technologies/companies can experience hyper-active movement through the Chasm, Bowling Alley and Tornado phases during a serious bear market. Because an extended weak economy probably doesn't support sufficient IT spending to generate the necessary hyper-active movement, with rare exceptions. One can do some digging through the past 30 - 40 years to see the unfolding of certain technologies involving companies like IBM, Oracle, Texas Instruments, Intel, Microsoft, Cisco, Xerox, Polaroid, etc... amidst various economic scenarios. As far as one example given in the 'manual', in the previous recession period of 1990-91, the demand for Cisco's product was large enough to go against the economic stream and indeed qualify as a tornado. That was most likely the simple combination of a mission critical broken problem needing a 'fix' and 'timing'. Perhaps the tornado growth through that recession was 'muted' in terms of IT spend because of the economic backdrop, but it illustrates that the most important element is the need to fix a mission critical broken problem - regardless of the economy. Had the timing not been during a recession, perhaps the tornado numbers would have even surpassed those reported at the time due to the unleashing of IT dollars. Then again, one could argue that it is pointless to compare that recession with the current one underway. Regardless, I simply bring it up as an example of a previous recession which spawned tornado growth in spite of it. In fact, it was a plum of an example. If anyone knows the exact history of some more mature technology companies and their product adoption life cycles in regards to the economic cycle over the past few decades - it would be interesting to hear your thoughts. At the moment, there might be - or there might not be - any mission critical problems that need to be fixed. I wouldn't want to assume that mission critical problems that need to be addressed only occur during expansion periods in the economic cycle. Every now and then, we will probably see one come along - regardless of the timing - that is such a large demand 'need' that it creates a tornado in spite of the economic picture. I think the Cisco case in the early 90's represents one of these instances and that's why I listed it as a "plum". We would have to go back and comb through the past 30 - 40 years to explore mission critical needs that were filled with fixes by technology companies during a myriad of economic backdrops. Not all have such large target markets as others, but I wouldn't be surprised if there are a few "mission critical need solving" products that might contradict the economic backdrop at the time of their introduction. So, rather than a frustrating search for bull market Tornados now, why not simply pick well known, Main Street Gorillas and Kings with lots of cash, that are eventually offered up as a true bargains because of the bear market. Just looks to me to be a more practical way to go GGing for a while, IMHO. Sure. I agree with you on looking at the better balance sheets well positioned to weather this type of economic environment if they start to sell at 'true bargains'. Not because one will make explosive 'growth returns' in years going forward, but simply for the assumption that the companies like Intel, Microsoft, Applied Materials, Dell, etc... are most likely not going to close their front doors. There's no reason to always have to be searching for new mission critical needs and their fixes unless one is keeping an eye on possible games forming. Some of those at the moment may be going on and we have absolutely no idea they are developing at the moment. Companies that are still private come to mind - or private companies that are being acquired or will be acquired by larger players during this location in the business cycle. Other games have been put 'on hold' in regards to the spending freeze and some of the more mature ones are stumbling along as expected as the contraction in the economy and slow demand plays out. Although we can assume that the better balance sheets of Main Street companies will survive, there is no guarantee that they will be the explosive bull leaders in the next bull market. However, we cannot overlook the length of their product adoption cycles and the cash they produce. Some companies involved in 'younger' technologies that have not yet reached such a mature stage in their product adoption life cycles could offer 'true bargain' values as well. It all depends on how practical one is - or what sort of portfolio mix one finds to be practical when searching for 'true bargains'. BB

To: RobertHChaney who wrote (47374)	10/2/2001 4:51:31 AM
From: chaz	Respond to of 54805

Robert-- Right on. There's good news, and there's some bad news. First, the good news! Congress and the Prez look like they've agreed to throw away the Social Security "lock box." And now the bad news. The guys who control IT spending are borrowing it for the forseeable future. PLEASE, don't anybody start throwing rotten eggs at me. I'm not making any political statement here, just trying to add a little late night levity for those who use toothpicks to keep their eyelids up this late at night. Chaz

To: RobertHChaney who wrote (47374)	10/2/2001 12:36:03 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

The original book was released in March of 98. The original GG book may have been released then, but it was not primarily a book about predicting the future, but rather about describing fundamental patterns which had been observed. If one sets aside or isolates the investment specific aspects of the GG book, which after all is separate from most of what Moore has done, then GG is simply the culmination of the Chasm and Tornado books, which go back quite a bit further and are themselves, descriptions of observed patterns, not forecasts.