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

To: Stock Farmer who wrote (48131)	10/20/2001 2:36:33 PM
From: Thomas Mercer-Hursh	Respond to of 54805

Therefore for the basket strategy to fetch outsized returns either (a) the market must get the estimate of the patch size wrong, or (b) the gorilla must win more than what the rest of the basket loses. Isn't this what we actually expect? Given that we have a gorilla game without an identified gorilla yet, the theory is that the market underestimates the length and scope of the dominance which will emerge. So, as the gorilla emerges, it inherits that potential. Even so, to the extent that the basket approach makes sense, I think it depends on care in what goes into the basket, i.e., winnowing out non-contenders from the very beginning, and aggressive thinning as play develops.