Thanks for the comments, I'll pass them on to Dave. Interesting , Dave is a member of a couple investment clubs here in Dallas and he says it is real interesting to see how they analyze potential investments.
He says that he walks in with a company like BIOI, or other similar to it, and immediately everyone is on the defensive since they never heard of it, don't know what they do, may not be familiar with the industry segment, are afraid of the small caps in general, etc. According to Dave, if you walk in and recommend say Merck or some other large company at least a few will pat you on the back and say good job, makes sense, lets buy.
I find that very interesting because I truly believe that smaller companies are less risky, over time, if you use a value oriented approach and select 10-15 companies to invest in long term. Sure, one or two will hit the ground - but the 5 baggers will more than make up for the losers.
An interesting article in the New York Times yesterday (Sunday)pointed out how small caps should outperform over the next six months, and how it is almost impossible to get information on them from a broker - you need to subscribe to a newsletter to get good information.
Looking at the newsletters they recommended I was just shocked - not at the ones recommended but the performance, or lack thereof. A couple of the more interesting ones getting press are below:
CALIFORNIA TECHNOLOGY STOCK LETTER
(415) 726-8495
www.ctsl.com
One-year subscription$ 295
12-month return (Computer/Electronics Model Portfolio) +12.0%
THE RED CHIP REVIEW
(503) 241-1265
www.redchip.com
One-year subscription $389
12-month return -2.1%
Of course, these numbers are Mark Hulbert's. No offense to Red Chip review subscribers meant, they do a very good job analyzing companies in my opinion - and everyone has periods of underperformance. This was as of September 30th, so with the Asia crisis and tech slump the returns most likely are lower today.
Not quite sure what to make of this article - again just shocked that the Red Chip and Micheal Murphy's letters did not have returns much better.
Best - Joe |
