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

To: Stock Farmer who wrote (54606)	11/4/2003 1:52:41 AM
From: Mathemagician	Read Replies (3) \| Respond to of 54805

But the thesis remains: if the Gorilla Game is a valid strategy, and there is a basket {X, Y,... Z} from which an eventual Gorilla G is likely to arise such that P'g > Sum {Pn} then various participants in the market will anticipate the Gorilla amongst the potential candidates X, Y, ... Z and act to raise the prices accordingly. The same is true of any strategy. There will be a basket of trades, some of which will be winners and some of which will be losers. If whatever strategy used to select the basket of trades is valid (well, profitable) then the market will behave in such a way as to cause the sum of the winners to exceed the sum of the losers. The fact remains that the Gorilla Game as presented in the book has neither been proven valid nor invalid. Regardless of what the author may or may not have said, it is untested. You are entitled to your opinion that the most recent 4 years are proof that the GG is an invalid strategy. However, I have yet to see the results of any comprehensive study or application of the GG as promulgated in the "manual" over this period. You have yet to provide a reference to any portfolio selected in 1999 strictly according to the guidelines of the GG. I would be very interested to see one. No, this thread's 1999 GKI (which happens to be profitable despite not having sold any of its components as specified by the GG) is not such a portfolio. In addition, the last 4 years were not exactly "normal market conditions". Would you say that a theory is invalid because it performed poorly between 1928 and 1931? This discussion makes me wonder how other long-only strategies have fared over a similar time period. The volatility of long-only strategies led me to learn how to short and from there it was a small step to the futures markets, where one can spread risk around to the point where a bubble and bust in the stock market (or any market) is but a small bump in the road. People are intimidated by the leverage available in futures, but if used properly (to diversify intelligently, not to place large bets) it can be an indispensible weapon in your arsenal and is the key to low-volatility returns. <font face=wingdings>e</font>