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dear Ralf,...your style of investing is alright.The problem is one has to be extremly patient to be able to find very low valued stocks.i get to do my own trading because i have a self directed ira.last year i was extremely lucky to find very undervalued stocks.in oder to increase my profit potential i bought leaps of mrk,jnj,ibm,mo,bmy,csco,ko,pep,bay and many others.i have been handsomely rewarded.one has to be alert because opportunity does not last.when gic dropped to 18 i was able to buy some leaps.gic closed at 30 today.i think the best time to buy these bargains is when the whole sector is depressed.pharmaceuticals were depressed last month but have gone up now.do you have a program that automatically tags these stocks or do you manually scout the stocks like me.?.as a busy md surgeon, it is not easy.
you are right, with such a patient investment strategy I miss out many opportunities. The reason why a am so patient is, that I believe that the many US stocks are generally overvalued. Just one or two years ago ,I found it much more simple to find undervalued stocks. I trace my stocks manually to, I don"t even use a chart program, but I get my charts from internet. I like pharmaceutical shares too. I have bought shares in the german Merck AG (which has nothing to do with the US Merck) I am very cautious with tech stocks because I have only a limeted investment beckground in techies but I am watching them through SI. Currently I think that Quarterdeck is very interesting because its the cheapest internet related stock, but I have not yet decided to buy. I plan to do some profit taking but I have to wait until June for tax reasons. As a german investor I have my stockholdings mostly in Germany and Europe.Besides tech stocks, I think US stocks are not interesting right now.
Ralf, I think your overall strategy is a good one. One suggestion: Apply your criteria and then stick with what the market values in tech. For ex. the market for servers has been and will be strong, but historically those companies haven't commanded a premium price on NASDAQ(those that make servers alone) Otherwise we would see ASPX doubled in price by now. Some other element endemic to the whole technology sector would have to begin to demand a premium value for that to change.
For ex, a premium placed on a diversified product line serving many industries, Interpoint's products, or a few products meeting many industries needs, routers and multiplexers.
I'm sure other tech niches will do well, but just be aware of the risk that is there BECAUSE no premium value has ever been in the product area by way of the stock price. The market can be very flighty in this respect.
no I do not use option prices to gauge the technical condition. I follow only some technical pattern (like the well known W-formation) to decide if the stock may go up. I also observe the general market condition. If the general market is overvalued (I think this is the case now) I am very cautious.
clownbuck....ironically I just located this board that you moderate "Investment Strategy" and even more ironic is that your investment strategy is very similar to mine with regards to turnaround investing.
I'm sure I could learn from you, and with my 10 years of experience investing in turnarounds and 40+ years of experience of running businesses (some successful and some like stocks not so successful), maybe theres something I could offer with regards to my investment strategy.
I'm not sure why it makes much difference to you, but if you don't want me sharing my past experience investing in turnarounds and how it applies to some of todays experiences you may wish to reconsider.