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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Harry Landsiedel who wrote (74347)	2/23/1999 7:22:00 PM
From: Tony Viola	Read Replies (2) \| Respond to of 186894

Harry and Intel investors, I got a good "barrel of laughs" from this post containing some definitions of gorillas and kings, out of Geoffrey Moore's book. It's from the G&K thread, courtesy Lindy Bill (btw, I disagree with his calling Intel overvalued, but let it go). Half way down is what cracked me up: Message 7991640 Here are some ideas from the book, "The Gorilla Game", that are designed to help you value "overvalued" stocks like, MSFT, CSCO, INTC, and others. I have quoted directly from, and also summed up, parts of the book. The "Gorilla Game" is a form of growth investing that focuses on High-tech, and specifically on product-oriented companies that sell into mass markets undergoing hypergrowth. GORILLA A company that controls it market because it has a discontinuous innovation ,one that is not compatible with existing systems. The market is in a hyper growth stage, and they control the architecture. There is a high switching cost to using some other company's product, CHIMP A company that tried to become a gorilla but did not get picked. IBM's OS2 is a prime example of a Chimp product. Apple is a chimp MONKEY A company that makes the gorilla's product and sells it for less. AMD is Intel's monkey. Ascend and Fore are Cisco's monkeys. KING The Market leader, properly with a two-times lead or better over its closest competitor. If the lead shrinks too far, the king becomes a prince, and we have a kingless market. Because they lack architectural control, and because switching costs are low, they cannot force competitors onto the defensive the way Microsoft, Intel, or Cisco can. Compaq is a king. Seagate is a king of hard drives. PRINCE A market challenger, potential co-leader. Dell is a prince to Compaq. SERF A market also-ran. These companies fill out the low end of the market. The key thing to remember is that it is easy to confuse a gorilla with a king or prince and get burnt, as happened to a lot of people recently with DELL. A king's power is neither as dramatic or as persistent as a gorilla's, so you have to be much more cautious.