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

To: Stock Farmer who wrote (49505)	12/15/2001 3:03:32 PM
From: Bruce Brown	Read Replies (1) \| Respond to of 54805

Bruce, the dialogue has deteriorated considerably. Which is unfortunate. I can think of more unfortunate circumstances. The crux of the issue is that I was simply taking the side of the technology adoption life cycle being an important issue to consider when determining the opportunity for investment in the first place. You have admitted that it is indeed important, but have moved straight to the valuation process mentioning that we currently see and have seen valuations that priced in so many quarters and years of profits that the risk scenario was in no way weighed in the direction of creating a scenario in which investment dollars should be targeted. Depending on which particular investment and the prospects for the duration of their technology, we could find various examples that do qualify as high risk as well as not so high risk. Personally, I was not aware of issues surrounding an investment in 1986 of Microsoft, but I did start to follow the company quite closely come 1990 and 1991. Although I do not have the data to support my claim because it is all based on memory, I remember a lot of commentary of valuation issues surrounding not only Microsoft (namely a lot of overvaluation issues), but other companies that enjoyed the benefits of a long and fruitful technology adoption life cycle. Many of these investments far surpassed the wildest imaginations of both pro and con sided issues with Microsoft at the time - or other companies. I cannot disagree with the premise of overvaluation at this point in time looking back on the past couple of years in which an entire environment unfolded that was based on trading rather than investing. Following the trend and disconnecting the underlying fundamentals from the company seemed to be the elements that caught many investors up in the bubble within technology - although it spilled over to other areas as well, but for the most part we can concentrate it on the technology industry since it was moving in a general wave. I also fear that such an environment has not disappeared - nor will it disappear - creating a different type of higher paced market that creates a challenging environment worth thinking through before participating. And I admit to having devoted the greater part of the past 14 months into learning the ins and outs of that part of the trend game for both the long and the short side. Would you suggest that the Gorilla Game is not a methodology for technology investment? Or that if it is, it is intended to be inferior (or at least equivalent) to other strategies when it comes to securing return on investment? I do know that the elements presented in Chasm, Tornado and GG do help one think through the issues of why a standard develops, what happens to the companies whose standards are not adopted as the dominant and helps one consider longevity in the technology arena for those portions of one's portfolio that might be weighted in technology. Of course, money can be made in companies that are not the dominant standard from time to time - as well as playing in the peripheral royalty games that surround a technology adoption life cycle of the layer of technology that is of importance. I made the most money in my investing life from Dell Computer simply based on growth and execution even though I also held shares of the layers of technology for which Dell was in existence - Intel and Microsoft. There will most likely be other "Dell like" investments surrounding technology adoption life cycles over the years and I am not adverse to playing them providing they exhibit excellent growth and execution prowess. If not, then it is about investing and securing disproportionate returns compared to the alternatives!!! I'm not sure what your definition of disproportionate returns is and assumed you were mocking some of the "inside jacket cover" material. If I assumed incorrectly, my apologies. If we label disproportionate as beating the market - then there are times when such a scenario unfolds in growth investments that target a large enough of a market to grow faster than the overall market. Of course, as you well know, this is not limited to only the technology sector. P.S. Having used the words "cool" and "poppycock" here: Message 16796050 are you now retiring to the mudge thread? No. I've already overstepped my traditional boundaries on that thread as my previous routine was to drop in once every 80 or so posts. I've been there far too often lately so I have no desire to use those two words here and retire as a mudge. In fact, I am now about to retire to a family outing to finally see Harry Potter followed by pizza cooked in a wood burning oven on a cold winter evening here in Vienna. If anyone says "poppycock" or "cool" in the movie, I will drink a beer for each offense. BB