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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Axel Gunderson who wrote (484)	7/9/1998 11:11:00 PM
From: LemurHouse	Read Replies (3) \| Respond to of 1722

Axel, you raise a number of my favorite issues, but they cover a lot of ground so I hesitate to respond. FWIW, here's my two cents. I believe concentration is better than diversification, provided that one is working within one's "circle of competence." Like you, I've been influenced by Phillip Fisher as much or more than Buffet or Graham, so my advice would be to avoid the basket and to go with the few companies that you believe strongly in. I've gone with the basket approach when I've been unsure which company will perform best in a particular sector, and I've generally been disappointed with the results. Have always felt that had I'd either waited or put more time into studying the situation to pick the single winner I'd have been better off. If the problem is valuations, Graham would counsel patience. If its understanding or identifying the winner, Fisher and Buffet would counsel waiting and studying. I can't comment on the specific stocks you mention, because I haven't a clue about the ag equip business. I am an absolute believer in staying with one's circle of competence, and its hard enough keeping up with the area I've chosen. I have a more general question to put to the thread: how to apply the wisdom of our collective gurus' to the area of high-tech investing. My own view is that Graham, Buffet, and Fisher provide a valid roadmap for high tech investing, except that the timeframes need to be shortened down to 18 - 24 months. Why? Because the sector is characterized by a very rapid rate of change. Business fundamentals can change very quickly, and it is very tough to see very far down the road. This makes it impossible to buy tech stocks "as if the stock market was going to be closed for the next 10 years" a la Buffet, or based on numbers alone, a la Graham. (I also have to admit that I'm not as patient as perhaps I might be. I'm certainly not 20 years patient.) I believe this qualifies as "investing" and not "speculation", but Graham might not agree. This approach has served me quite well, but one should be wary when rejecting the advice of the gurus like Graham and Buffet, and I'd be interested in this thread's views on the time horizon issue, as well as the general question of how to apply value investing principles when seeking growth in the volatile high-tech arena. Sorry if this question is too open-ended, but hell, if we can't discuss it here where can we discuss it? Finally, I want to thank Porcupine, Wayne, yourself, and the other threaders for keeping this thread going. I'm only an occasional visitor to SI, but I always like to check out this thread when I'm here. Cheers. Andy