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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (2977)	1/29/2002 3:45:45 PM
From: Jurgis Bekepuris	Respond to of 4690

UF, Though being rude, John has a grain of truth in his argument. If you are trading or momentum investing, why would you need "sustainable competitive advantage"? Why can't you trade or momentum invest just any company? The "sustainable competitive advantage" adds a tremendous advantage only if you buy-and-hold. Original GG may be even right that adding valuation sells is a losing proposition, because G&Ks are nearly always undervalued and selling at "overvaluation" leaves too much money on the table. Maybe you have in mind that "sustainable competitive advantage" companies are better in some sense for trading or momentum investing as Buffettology companies are better in some sense for valuationist investing? Inquiring minds want to know... Jurgis - but rudeness and pissing contests are prohibited on this thread too!

To: Uncle Frank who wrote (2977)	1/29/2002 4:26:22 PM
From: Stock Farmer	Respond to of 4690

Pissing contest? LOL.. When you stand in a toilet it's rather immature to blame the folks who come and do what's natural. A question was posed to the thread to which you responded. Which stimulated a response. Nothing more, nothing less. Yes, the GGame has at its heart a methodology that identifies competitive advantage. And if that was all it stood for that would be good enough for me. But it's been marketed, positioned, practiced (and discussed on the G&K thread) almost entirely in conjunction with LTB&H investing. As though investing profit = "sustainable competitive advantage". Twenty years ago DEC had the kind of sustainable competitive advantage that SEBL could only dream about. And where are they today? Considering that most of these companies need to remain even more sustainable than DEC in order to earn their valuations through earnings growth (even if we treat pro-forma profits as real and growth rates as permanent), seems to me that the whole G&K thing is overdone as a method of selecting an investment. And if one looks beyond the slice at any price and begins adhering to a value-based strategy, then one can dismiss the whole concept of "competitive advantage" as a sole selector and focus instead on value metrics. Amongst which might be competitive advantage. Neither necessary nor sufficient. On what basis do I make this claim? Since the G&K thread was launched, the methodology has a rather poor track record overall. Where 6.5% T-bill was the benchmark of abysmal, the G&K index has managed a whopping 7.1% ~ not that it's alone amongst abysmal methods. Just that from an objective perspective it's hard to crow about T-bill returns. Why? For every QCOM that folks retrospectively claim was identified by GGaming, there's also an ATHM conveniently forgotten. I have been a student of the game for several years, but thankfully not a practitioner. I remain a student however, because there are nuggets of value in the methodology worth paying attention to. But not as a whole-cloth strategy. All in my opinion, of course. John