Paul, I agree there is definitely risk with INFO, and that's probably with any stock trading below cash with no debt. Otherwise there is no reason for it to trade at such low price.
Many research reports documented the high book-to-market (low price/book) group outperformed the market in the last 30 years. Some think it is because of the higher risk, some think otherwise. If the statistics proved that group worked in 30 years, and I am buying a basket, I don't think I am taking higher risk.
Regarding my market model and went short early in the year. I could not find any deeply undervalued stocks before August 2004, so I "promoted" my secondary market timing indicators to my primary for-profit tool. I had some successes and failures, eventually did not want the monthly volatility, also I was able to find deeply undervalued stocks again recently, so I became a buyer in the last 1-2 months, covered short positions at a loss. INFO is one of my largest holding now, bought as low as $1.36 since late Oct. mostly below $1.6. I think I have a very reasonable chance to sell INFO for a 50% profit in a year.
I am a value investor and I am back to "below net liquidation value" investing again big time. I am a little surprised to see so many stocks entered into my buying range in the last two months while the general market made new highs since 2003. |
