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Technology Stocks
Technology
stocks can offer great reward potential. They get so depressed that
they frequently offer a better risk/reward ratio than so-called "value
stocks".
Technology
stock investors as a whole are a unique bunch. They are very emotional.
Just take a look at some technology stock's message boards and you'll see
either tremendous optimism or great pessimism. These emotional and
fickle investors (really traders) bid technology stocks way up and then
sell them way down, paying no attention to valuation at either end.
We take advantage of this. We step up and use our rational approach
to stocks and recommend buying technology stocks when the valuations are
so low that the stocks often trade under book value.
We
pick technology stocks that carry no debt and have cash in the bank.
We don't like consistent cash burners. Technology is cyclical in
nature but most people don't realize it. Buy financially secure stocks
at extremely low valuations and sell them later at much higher prices.
We avoid a lot of the risk that regular "contrarian" or "value" investors
face. They go after companies with weak balance sheets in the hope
that the business turns around.
We
always go after big gains. We don't pick a stock unless it can go
up atleast 100% within 12 months.
Actual
risk and perceived risk are two entirely different things and big money
can be made by taking advantage of misperceptions. |
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