I have been investing in stocks for 13 years, so I have a profound investment knowledge. Over the years, I have developed an investment strategy and made some handsome profits with stock market investments. However, I feel, that my strategy cannot by applied to the fast moving markets of techs stocks. Therfore I want to exchange knowledge with other experienced investors.
|An SI Board Since March 1996|
My strategy works as follows:
1.Watch only shares at rock bottom prices, they are oversold and might be a bargain.
2.Find out why the stock is sold! Sure the company has some problems! Find them out! Are they short term or are they serious. Be careful with long term problems!
3. Has the company a good management (at least in the past), strong balance sheet, large market share, good products. Is the company big in absolute figures (sev. bill. $ turnover). Buy value! (look at the book value, the value of competitors, P/E/ratios in the past, market capitalisation to revenues ratio) If the manegement is bad, has the CEO changed? (Good sign, but some bad news ahead!) Are their bad news ahead? Is the company acting in stable markets or in turbulent markets? A big company, with a sound balance sheet acting in stable markets will in most cases have a comeback! Buy only shares, you want to hold longterm! Buy quality companies, no junk! Do not buy long term underperformers, even if they seem to be cheap! Do not try to make quick trades.
4. Look at the charts! Has the stock price bottomed out ( W-chart/formation ?) It might be time to buy! Don't forget the general stock market condition. Is the leading index high? Then be careful!
This is my strategy, described in short words. Its best suited to blue chip shares. I did not touch tech stocks until now.However I feel that certain semi stock do fulfill my conditions. I like the intel stock very much and will buy it when it approaches the 50$ mark. I do not see another company with such a high investment quality which is undervalued so much. As a long term investor, I do not bother about one or two weak quarters. Also AMAT looks fine. However, I do not like poor dogs like National Semi, or DRAM-producers at the beginning of a downside cycle like MU. I do not like overvalued Internet stocks like Netscape etc either. The internet bubble has just begun to burst!
Any suggestions are welcome!