To: Harry Franks who wrote (2066 ) 1/29/1999 6:10:00 AM From: TLindt Read Replies (1) | Respond to
More from your Article....The gorilla game involves learning how to spot industries that might give rise to gorillas and to learn when to invest in these industries so as to minimize the risks but still capture a significant share of the gains. For the investor, three periods are crucial: the chasm, the bowling alley, and the tornado. The chasm represents the market after the early adopters have jumped on board but the more pragmatic buyers (the "herd") remain reluctant to commit to the new innovation and older industry players try to belittle the upstart's offerings. The bowling alley is the first step after crossing the chasm, the point when a new product penetrates whole niches of a larger market. The tornado represents the market stage when a product moves beyond these niches, proliferating in the mainstream mass market. But they say an investor should buy an entire basket of stocks (usually two to four) representing all the companies with a good shot at becoming the gorilla. The goal then is to look for signs of the emerging gorilla, usually selling off the also-rans (called chimps) as they drop out of the competition. An investor should consolidate the money from those stocks into the remaining candidates until only the gorilla remains. The gorilla should then be held for the long term, until an entirely new product category seriously threatens to end its rule.
