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I started this thread below, in an attempt to actually bring back some positive discussion to the Rulebreaker - Strategies mssg board.

I am very impressed with this board and with the stocks that are screened out using the GG process.

I would greatly appreciate any opinions you may have, in terms of investing strategy, on the post below.

http://boards.fool.com/Message.asp?id=1030051003132000&sort=postdate


Thanks for your time and input,
Aridian
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I am very impressed with this board and with the stocks that are screened out using the GG process.

I would greatly appreciate any opinions you may have, in terms of investing strategy, on the post below.


Just a couple of thoughts. First, there is often a lot of overlap between GG companies and RB /RM, as you observe with regard to MSFT, CSCO, etc. A benefit of GG is that it (hopefully) enables one to invest in these companies before they become RBs. Recall that the objective of RM investing is similar: to find RMers before they get there. Second, GG is limited to high tech by definition. You won't see CRA, AMGN, SBUX or GAP (is that the symbol?) discussed here. Not necessarily good or bad, just a difference.

I started investing in RBs and RMs before GG primarily because the GG looked like it took too much technical knowledge. Since I started in GG investing, I don't pay too much attention to RB / RM other than to read the daily RB article and watch my CRA go up (better to be lucky than good). I personally like the GG's focus on tech (with the exception of biotech, I only invested in RB/RM techs anyway) and within the tech sector, I find that the GG gives me all the analytical tools I need.
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Aridian -

You have identified 2 great strategies for finding
great tech companies. Both focus on patents or
proprietary technology, or at the very least power
derived from high switching costs.

Since you asked in your linked post...I see no reason
to try to combine the two strategies. Both are useful
strategies which were designed to work based upon
past observations, with a logical look to the future.
But combining them is about as useful as combining
two healthy products like orange juice and milk.

The Rule Breaker strategy seems a little datamined
to me. I see no reason to disqualify a company as a
rule breaker simply because no analyst has publicly
declared it as overvalued. My guess is David Gardner
dealt with AMZN and AOL constantly being bashed by
Barrons, et al., and simply fell into the trap of
believing there was something to a company being an industry rule breaker if the analyst underestimated them. Heck if you watch the talking heads on TV these days you would have to declare the entire market as having satisified the "grossly overvalued" criteria. Apparently the only undervalued company on the planet is Phillip Morris. (Whooo-hoooo....BUY!!!!!!!)

I also believe the "Relative Strength requirement" is on the edge of datamining. And what RS should we use? 13 weeks? IBD? 52 weeks? Overlap? RSW? Naturally a gorilla or king is going to garner a lot of share purchasing, driving the price upward eventually. And yes AOL and AMZN were each running nicely prior to TMF's purchase. But just because the ramp up has yet to begin should not disqualify a company. This kept any strict Rule Breaker out of Qualcomm until last summer.

Better than following the Rule Breaker credo to a T, I find it is more useful to examine the logic. The other criteria are quite sound and have much in common with Gorilla Game criteria.

That's my take.

Dan

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Thanks Dan,

You made a lot of great points.

I was wondering if you or anyone else may know of a GorillaGame type strategy that can be used with BioTech?

If you read my replies on the RB-Strategies board, you probably saw that I gave RuleBreakers at least one advantage over GG, in that it could be more diversified and does not have to focus on pure Tech plays.

With that in mind....is there a GG contingency plan if the Tech market shifts momentum in the other direction for a year or two?

Is there a way to build one's portfolio solely on GG criteria, yet be diversified enough to withstand an industry slowdown in technology stocks?

Thanks for all the input,
Aridian
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Aridian,

If I may put my thoughts on the table, and I am just moving from kindergarden to the first grade in this area. As you know, technology moves so fast that there will probably always be a few companies that are forging ahead with new breakthroughs and products. We weren't around for the railroad boom or the industrial revolution, but this technology revolution seems to be endless. But my education in any tech feild is pretty much nill.

One thing that keeps coming back, in my mind, is the Gulf War. In 1990 when we attacked Iraq, our war technology was so much more advanced than anyone else's, it was a wipeout. Two years ago, when we bombed again, the technology we had, made the 1990 stuff seem like old hat.

This, most of all, shows me that technology is here to stay. It's too bad that it takes war to bring out the best that a country has to offer, but that is the way that it has been since the beginning of mankind. I'm not saying that we need a new skirmish here and there to test our new stuff, but don't count it out.

What I'm trying to say, is that, now more than ever, a technological advantage over an opponent, weather it be war or business, will have each side putting all their resources into succeeding. So I truly believe that we are still in the infancy of the "tech boom".

This is why I am totally invested in tech stocks for the foreseeable future, although we must stay on top of any new developments. Because, it seems that the future is coming to us faster and faster.

Hope I made some sense, and have a great weekend,
stibbles :)
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Duh, sorry Aridian,

I didn't read your post #1325 before I posted.

Looks like you're way ahead of me.

I'll read up on the other posts before I jump the gun next time.

Tail tucked between my legs,
stibbles :~/

How'd you like my war analogy? I'm not gunhoe, but history does prove that war escalates thinking. Survival instincts I guess.

Have a great weekend
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Stibbles,

Aridian was temporarily (I hope) suspended by TMF for telling some malcontents on the RBreaker board to get a life.

So, since this is my favorite doppel anyway, I thought I should respond on Aridian's behalf.

Your war analogy does ring true to me on many levels, but I think it is also necessary to look at the many well-intentioned pursuits of most scientists leading their respective technological advances.

Many scientists, in my opinion, are obsessed with their field, that is why they excel at what they do.

This obsession is a good thing in the sense of advancing technology, but whether that technology is good for man or not, depends on the ethics of the scientist who creates it.

Scientist A may create solely for the pleasure it gives him, oblivious of the harm or good inherent within his creation.

Scientist B may create solely for the good of man.

Scientist C may create purely for greed.

Scientist D may be forced to create against his wishes.

Scientist E may create with purposeful malicious intent towards others.

In all of these examples, what the intent of the scientist is may still not have any direct bearing on the effect of the created technology on society.

In other words, while seeking a cure for cancer, it is possible to create the deadliest disease known to man from a variation of that cure, or a deliberate misapplication of it.

While creating the most aggressive heat-seeking missile with deliberate and immoral intentions, you may create the world's finest missile defense system.

There will always be Good vs Evil, Givers vs Takers, Helpers vs Users, and Positive application vs Negative application.

The only thing we, as humans, can do, is to try to do right by ourselves and our family, while never bringing another down to lift ourselves up.

We can then only hope that the rest of society learns from the examples we set, and from the goodwill that we share to others.

I am an idealist first, an optimist second, but the realist in me is firmly rooted in my subconscious.

The realist in me sees the world as what it is, but allows me to also glimpse what it could be.

A wise (lowercase) man once told me, "what you think about is going to come true."

So I prefer to think of the good in all of us, the potential inherent in each of us, and I can only hope and dream of a future where technology makes the world a better place for my family and for me.

Good luck finding those Gorillas,

Callante
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