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

To: Wright Sullivan who wrote (906)	1/3/1999 1:43:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 4691

Good morning Wright, First the important stuff: TTFN is Ta Ta For Now. I think you miss the point of the "Gorilla Game" investment approach. The idea is that you don't know which companies will emerge as "gorillas" (but you do know which industries will). So you buy all of the companies in the sector (well, the serious candidates anyway). Then, as the situation begins to crystallize you switch out of the "losing" companies into the remaining ones -- becoming more and more concentrated as you go along. The essential difference is that Buffett looks for the "gorilla" after it has not only emerged, but has been thumping its chest for quite awhile. I just received the latest edition of Michael Murphy's book High-Tech Stocks & Mutual Funds. In it he points out that the non-tech sector of the US economy is gfrowing at only 2 - 3% per annum, compared to the greater than 20% per annum growth experience by the tech sector. So, I wonder why the fascination with being strictly Buffett. The current industrial revolution began in earnest in 1981 with IBM's release of the personal computer, and Murphy estimates that it has at least another 20 - 30 years before it runs its course. The opportunities in front of us are truly awesome! But let me throw the ball back in your court. Given the relatively poor long-term growth prospects projected for companies like G or KO, why invest in them when you could put your money into NETA which has an estimated long-term growth rate of about 35% (which, by the way is quite profitable -- those one time charges because of all of the merger activity obscure that; consensus estimates are $1.53 this year and $2.13 next)? What I would love to be able to do is to find a way to update Buffett's thinking to a time of economic flux. Bear in mind that he made his money in the period between the two major economic revolutions of the 20th century. I think it is fair to ask whether Buffett's approach has general economic applicability or is restricted to those times when industrial revolutions are consolidating rather than emerging. Thanks for the opportunity to me to air some of my thinking. TTFN, CTC