Interesting point. I find that if I don't have at least some enthusiasm for a company and its products, I have a hard time sinking tens of thousands of dollars into its stock; i.e., it's very hard to invest just by the numbers. In fact, when I first started investing in earnest, I did it almost strictly by the numbers (as nearly as I could determine them) and the results were rather poor. You should have seen me, crouched over my computer, thinking I would find the holy grail on the latest S&P disk! I still have a large box of printouts generated during that era. Perhaps my results were poor because of the condition of the overall market at the time, or because my analysis of the numbers was naive, but partly it may be that without a spark of enthusiasm on the part of the investing public (including fund managers), even a good company's stock can languish for a long time, and my lack of enthusiasm is a reflection of that existing in the market. At any rate, I've pretty much given up "screening" as a stock selection methodology. Now I have a stable of perhaps 50 stocks I track, which I add to from time to time when I observe or hear something interesting. Mostly they are in the high-tech area, which I believe I know something about. At any particular time I am likely to have positions in about 10 or 15 of them.
OTOH, my initial purchase of SUNW was made pretty much without any analysis, after I heard some programmers talking about how much they wished they could afford the latest Sun workstation. When the stock plummeted soon afterwards on news that some important VP or other had left the company, I bought.
Warren Buffett reportedly drinks and serves Coke, so maybe even he needs a little enthusiasm in order to invest.
Comments, anyone?
JMHO, as always. |
