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

To: Stock Farmer who wrote (54543)	11/1/2003 3:06:37 PM
From: Mathemagician	Read Replies (1) \| Respond to of 54805

I guess I didn't make the point clearer. Let's say for example it is possible to select a basket of companies in which a Gorilla is likely to emerge. Okay... And let's assume that the theory of "outsized returns" from this basket is possible merely by investing in all of 'em and winnowing out the Gorilla. Okay... Now, if I was the only person on the planet who had read the best seller describing this strategy, then I might be willing to believe that the market would fail to price this basket in anticipation of a gorilla emerging. But that wouldn't have made it a best-seller. You don't have to be the only one doing it. You only have to do it better than the other people in the market, i.e. process the available information faster/better than others. Whether they admit it or not, every (non-criminal) investor in the market has the fundamental belief that they can do this. assuming the opportunity exists, then in order to win I have to be more adept at recognizing the opportunity than the market (which is the part of the strategy that appeals to the ego). Either on a macro basis (the basket in which a gorilla might emerge), or on a micro basis (the gorilla itself). Appeal to ego is not a part of it, not for me anyway. No matter what strategy you employ, it will not work unless you do it well. Doing it well is inevitably very hard work and requires ingenuity. In this case, the hard work and ingenuity goes into finding markets with the right characteristics before too many people notice. Then, as the rest of the market starts to notice the same characteristics (the more lazy people looking the better), the price of the entire group rises. If you can do this well, you are likely to EARN above average returns. These markets are not found by watching CNBC and they are not on a Gorilla Game message board. You have to find them yourself and that requires (you guessed it) working harder and processing information better and/or faster than the next guy. Few investors are willing to work hard enough at the gorilla game to be successful (or be smart enough to do it right). Rather, they monitor message boards looking for a guru to lead them to the current/next gorilla. Or, they buy gorillas way too late (and therefore at prices that ensure mediocre performance). This is not unique to the GG strategy, but is a fundamental property of most human beings. This is not new and will not change. “The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on others...” - Edwin Lefevre, Reminiscences of a Stock Operator It is the root cause of the failure of the vast majority of traders/investors regardless of strategy. Would you (JS) ever buy a stock just because you heard on CNBC or SI that it was undervalued? No way, from what I have seen. That's why you at least have the potential to be successful. The rest depends on your ability to calculate valuation better than the rest of us, which means you must be "smarter than the market". Which leads us to the conclusion that the ability to win at the Gorilla Game requires us to be able to identify Gorillas before they are gorillas. I suppose so, but not exactly the way that you meant it (at least, not the way I think you meant it). <font face=wingdings>e</font>

To: Stock Farmer who wrote (54543)	11/1/2003 7:05:05 PM
From: DaYooper	Read Replies (1) \| Respond to of 54805

Which leads us to the conclusion that the ability to win at the Gorilla Game requires us to be able to identify Gorillas before they are gorillas. I've watched your discussions from the sidelines for the last week John and now think I now understand the basis of our differences. As a gorilla game investor I disagree with the above statement. In my opinion the "ability to win at the Gorilla Game" requires simple patience. Gorilla investments will grow more over time than the market is anticipating at most times (excluding the market bubble phase). You have suggested other investing strategies which could very likely lead to better results than the GG. But I'm either too lazy, uninterested, or unmotivated to actively manage my investments. So I buy shares of companies with a sustainable competitive advantage and just let the investment stew without thinking about share price, valuation, or anything else. Clearly it's not for you but why do you care if I like investing this way? Many of us believed this investment philosophy even before Moore wrote the book. Moore suggested reasons that technology companies are able to completely dominate markets for protracted periods of time and he consolidated his theories into the book. He didn't invent the idea of investing in market leaders. When I was 14 years old (in the early 1970s) and old man I respected told me that was the way make money in the market. Of course he was talking about oil, car and steel companies and maybe IBM. I simply needed to take his advice to America's new growth industry. It works for me. Not for you maybe, that's fine. But it tires me to read post after post stating it's a flawed strategy. Best to you. May you outperform the market over the long run as well. Rory

To: Stock Farmer who wrote (54543)	11/3/2003 4:04:52 PM
From: TigerPaw	Read Replies (1) \| Respond to of 54805

Which leads us to the conclusion that the ability to win at the Gorilla Game requires us to be able to identify Gorillas before they are gorillas. The ability to win in any facet of the stock market is to have knowledge about a stock, industry, or event that is not already known and priced in by the public at large. The Gorilla game suggests that an investor can out research the other investors and so find the gorilla earlier. TP