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Enlighten, enrich and amuse. This is a fun discussion.

[Atari] may have had proprietary architecture (their own design) in a tornado market, but how was it open architecture? Where was the value chain? - Padavona

The value chain was in the production of Atari Cartridges for the Atari Console. Many companies produced games for the Atari Game console; there is your Value Chain; there is your open architecture. It just so happens that it didn't work out because Atari's leadership provided textbook examples of how to run a company and a brand into the ground.

What you had was a slew of competing technologies in a red hot market. Yes I remember Pong, but clearly Atari's 2600 was the first huge far reaching success in this market. - Padavona

In 1980 (the entry point for my example) there was not a “basket of competitors.” There was basically just Atari: the Gorilla / Monopoly.

In the history of gorilla gaming in high technology - one little mention in passing in one sentence in a book devoted to high technology. Does that mean . . . -BB

It means that when you're trying to sell a book about an investment strategy, it does not behoove you to illustrate the greatest example that strategy faltering. I realize that you would not have held Atari for 20 years from 1980 if you read the book. However, Atari was already piling up enormas losses by 1983! One must constantly be on the lookout for a changing landscape; the market will be quick to punish failure.

Their example of Atari as one of the players in the PC industry did not properly underscore how Dominant Atari was in the gaming console world.

I'm not sure most or all or even a few gorilla gamers would say that about the home gaming market. Certainly not about an early adoption market where the basket approach of candidates is the better strategy. -BB

I don't think ANYONE would touch that market now. I see more blood and carcasses there than in your average slaughterhouse! (both literally in the games and figuratively in the companies that produced them).

Apple went public . . . AMD went public in . . . What would have happened had we tossed $500K into Intel back in 1971 . . . BB

You are very fond of this example. I never said to invest in Apple when it went public. I certainly never said to invest in AMD when it went public (I did say to invest in Jan 2000, though).

And why would anyone, even Gorilla Gamers, invest in INTC when it went public? There was no tornado yet, no bowling alley – heck there wasn't even a Garage. INTC was not even a mouse or a duck, let alone a Gorilla; a mouse, FYI, is even weaker than a chimp :-).

Can you show me, using data from 1971 alone, why I should have bought INTC when it went public as part of the GG? If not, please stop using this example. It's tiresome and, frankly, it makes no sense. You can just as easily illustrate your point by showing that once INTC emerged as a gorilla (I don't know the date – but you should) they continued to provide stellar returns to date.

Buying AMD when it went public? Please. How about buying AMD when it was clear that their Athlon microprocessor was a discontinuous innovation (September 1999): Up 375% in less than a year! That's a little better example – don't you think?

Let's zip over to the April 19th Rule Maker report on the first quarter's numbers for 2000:

Or we could look here for another analysis:

Intel actually had higher OPERATING INCOME in Q1 of last year compared with this year. . .

Probably the most important number that should concern AMD investors from Intel's quarterly report is Intel's growth in microprocessor revenues YOY.

That number was a measly: 2.8%

For comparison AMD's grew:63.0%

Not quite as rosy –huh?

TMFFuz Talks about The Innovator's Dilemma and being attacked from below. If you think that the Athlon is targeting the low end or is an inferior product, or is in any way an “attack from below” then you had best check out some benchmarks! It's more like a nuke.

There are quite a few companies today that you should be purchasing for the next decade.

Among them are EGRP, GMST, QCOM, CRA, and LHSP (maybe even JDSU)– Just pick good entry points (like EGRP now!). I would not add AMD to that list even though it is my largest holding; they require constant reevaluation but are still a fantastic buy for at least the next 6 months for their microprocessor business and their flash memory.

Not all [gorillas] will win, but the one's that do win will more than make up for the one's that don't in your portfolio.

I agree. I definitely believe that GG investing will provide superior returns to index investing over the long haul. Just don't get caught up in the hype; don't pay $500 billion for Cisco or $140 billion for QCOM in 2000. They are GREAT companies – but price does matter.

I would hope that if you study the gorilla game in depth, you won't be stuck holding an Atari in your portfolio for the duration of 20 years.

We agree more than we disagree, BB. We would not be stuck holding Atari if it weren't for that 20 years of fishing (I, too, hate fishing BTW). :-) Holding Atari for 20 years is not in accordance with the rules of the Gorilla Game.

I see your point though...but I can not remember ever seeing a post where any of the more respected GG posters (like BB and Mike Buckley etc...) ever state that an investor in the GG tech markets should not have to worry about keeping up with the markets...LucidDreamer

BB has stated in prior posts that “You would have been better off buying CSCO in 1990 and gone fishing for 10 years.” I can't find a link, but it's kind of a null point – don't you think?

While I feel that the Gorilla Game should be re-titled to “you should have bout CSCO in 1990,” I similarly feel that my original post should have been titled “Just don't go fishing!” :-)



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