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

To: Jurgis Bekepuris who wrote (58152)	10/10/2016 7:11:09 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78744

The biggest risk with Gorilla investing is not overpaying for a Gorilla, it is to pay a "Gorilla multiple" for a stock that does not turn out to be a Gorilla. I think if you do Gorilla as your investment strategy, this is very likely to happen, even if you are careful. The few hits will have to pay for the many misses. FWIW, I worked for many years at a company that was considered a Gorilla in it's heyday and then the stock lost 99% of it's value during the years. From my experience, it is difficult to become a Gorilla just being a technological leader alone, in fact I would argue, if it is just technological leadership, the company in question is most likely not a Gorilla. It is technology together with network effect, brand recognition and market share and other factors that make a company a Gorilla. I think someone could develop a better search engine or a better Sol I also network website and still would not be able to dent Google or Facebook, because user adoption and network effect are driving factors that give these companies and enduring advantage. I also had my share of misses with growth/Gorilla stocks, but then I can also say I made out very decently working for a company where the stock went down as much as it did.

To: Jurgis Bekepuris who wrote (58152)	10/10/2016 11:55:14 PM
From: Shane M	1 Recommendation Recommended By Jurgis Bekepuris Read Replies (1) \| Respond to of 78744

"Regarding valuation, yeah, Gs can be overvalued. But valuing them at Value Investing level and using low growth conservative valuation methods doesn't make sense either. I took a look at some of my own posts on G&Ks and I think that was one of my big mistakes. Another mistake - the one that pretty much everyone committed - is not figuring the true Gs and not holding them forever. " I don't expect to find many "gorillas" in value stock territory (although aging gorillas like MSFT, INTC and QCOM have been unexpectedly there at various points in the decade or so.) I'll admit I could be wrong about the world moving faster now, creating shorter lifespan for gorilla. I expect that, but it very well could be wrong. PYPL Paypal is really the only stock I have currently that in my mind has developing characteristics of a potential gorilla candidate w/ network effects, but unsure if it'll be able to get there or not. It is expensive for sure. Like you mention I didn't hold my gorillas long enough. I sold my MSFT several years ago at a much lower price than it is today, and sold my INTC maybe last year, and it's gone on to new highs since then.