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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).

Yes, it illustrates semiconductors - one of the important breeding grounds for gorilla games and royalty games - as well as the benefits of long term investing.

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.

Both "Inside the Tornado" and "The Gorilla Game" list plenty of roadkill. I continue to disagree with your view of Atari and the home gaming market.

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 :-).

You are correct. Using the illustration of microprocessors and the PC technology adoption life cycle, 1971 was a non event for any investment as it didn't exist yet. To be fair, I should choose the time frame in the 80's when the tornado appeared for the PC technology adoption life cycle. My link to the Qualcomm comparison was not to be confused with a tornado being any where in sight for Qualcomm when they had their IPO. It was an illustration of two semiconductor stories and their first 8 1/2 years following their respective IPO's.

There seems to be so much micromanagement of portfolios that it's always nice to point out that some times, going fishing might have been the best solution and builds a strong case for long term investing in certain companies. How many were in and out and in and out and in and out and in and out of Rambus? Qualcomm? Cisco? Microsoft? Intel? Oracle? Siebel? i2? Others? I'm sure we could all raise our hands for decisions we made in the past that would have been just fine had we left things well enough alone and let time go to work for us. I sold Oracle after holding it for many years and then bought it back again last year once I realized that the enterprise application market computing phase of client/server was adding and moving to the zero intall client phase of computing. My loss and Uncle Sam's gain. My mistake as a high technology investor who was not doing his best research at the time. I sold a portion of my Rambus because I admitted I had made a mistake of buying 'too early'. I explained all of that here on this board when I was licking my wounds last year.

It's tiresome and, frankly, it makes no sense.

Point taken. The inside flap of both versions of "The Gorilla Game" list examples of "if you had invested $10K at the IPO" of some companies. If you pick up your copy of either book, you will see these examples on the inside cover. My fishing example is right there in plain view. George Gilder talks about the Intel example using the IPO date and price. I know that Gilder, Moore, Johnson and Kippola are all tiresome company, but if reality is tiresome - then so be it.

I enjoy knowing the long term results of great investments like Wal-Mart, Home Depot, EMC, CMGI, Dell, AOL, Microsoft, Intel, Oracle, Cisco and many others from the longer term time frame like Coke, Disney, GE, etc... . In the last decade we have all had opportunities to invest at or very near the IPO's of some fine technology companies that just might some day land in the same class of returns as the best from the mentioned list. Since I am planning on investing for the next 30 to 50 years, I like to know what the history of high technology (as well as other investments) have offered to long term investors. I'm hopeful and confident that I will have a few nuggets in my portfolio for that time frame. Will it be those early shares I bought of Uniphase, of i2, of Siebel, of Broadcom, of Brocade, of Redback, of Foundry, of Sycamore, of Juniper, of Ariba, of Qualcomm, of Network Appliance, of Lernout & Hauspie, of Gemstar or will it be shares of something none of us even knows exists at this point in time? Or will Cisco and Intel be carrying market caps of well over a trillion dollars and be paying their long term shareholders oodles of dividends?

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?

Was it clear that AMD has a discontinuous innovation? Or is it clear that AMD has a continuous innovation?

I believe the demand for microprocessors and semiconductors is healthy enough to create a compelling picture for investors of both companies. The amazing longevity of the PC technology adoption life cycle and the client/server technology adoption life cycle have lined all of our pockets with the kind of good fortune we should all be very thankful for as investors. The next 30 - 50 years will create similar opportunities for investors.

I will probably be doing some tiresome comparison of some of the stocks that had their IPO's in the 1990's for younger investors in 2010, 2015, 2020 and beyond.


BB
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