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Strategies & Market Trends : Hu model record - up 260% in 27 months
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To: Steve168 who wrote (26)12/4/2004 8:02:46 PM
From: Steve168  Read Replies (1) of 32
 
It looks like my "speculation/suspicion" on election and oil price were all wrong. Well it didn't hurt since I don't have any positions based on those. My semiconductor call was ok and I made some profit on AMAT and SMH.

I have been accumulating "below tangible book(cash) value, no debt" tech stocks last month, now up to 80% with zero short position. I am surprised to see many deeply undervalued tech stocks met my qualifications while the market is at 2004 highs, nontheless, I am happy to see them and buy. My favorite is a tech company trading below $4 with $6 cash and zero debt. Insiders own more than 25% and the management announced that they are evaluating strategic options to maximize shareholder value, including mergers/acquisitions or liquidation of the company. If they can sell any other assets (patents, know-hows, in-process technologies, etc), that would be on top of the $6 cash. The reward/risk ratio is high.

I recently went through some academic studies that low price-to-book stocks as a group outperformed the market by about 5% annually in the last thirty years. There are also additional separation of this group based on fundamental data that further improved the outperformance. I am surprised (and happy) to see some of their techniques are so similar with mine which I formed/acquired during 13 years practice and observation.

I will stay focused on this basket value approach, this is the primary (and main) strategy I should use.
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