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Hi Chris! Here is an honest-to-goodness answer to your note asking me to look at this Value Advisor site, particularly their January 1997 investment suggestions.
Value Advisor gives four recommendations for investing in 1997. The first is, "Avoid the large growth stocks that have led the market for the last 2 years." I really can't agree with that recommendation because I think society is currently undergoing a major revolutionary change caused by computers, networking, etc. Many of the best stocks are those taking part in this revolution, and have been the "large growth stocks that have led the market for the last 2 years." I personally think we are just entering this new age, and many of the leaders will continue to be the leaders, especially if they maintain heavy R&D budgets.
The second recommendation is, "Consider investing overseas where the values are often better than in the U.S." I think personal investment overseas is risky, since you cannot easily tell what type of shannanigans are going on. I prefer a U.S. company, or a Canadian one like LGS Group, Inc., which has a strong overseas growth program. What's going on with these companies can be easily monitored.
The third recommendation is, "Favor companies with strong balance sheets." I agree with this, but find only 3 of their 8 recommended companies have recent quarterly reports which would make me want to invest in the companies. (GAN, MT, RFSI)
The fourth recommendation is, "Best values found in these categories: 1) companies with a rising well-covered dividend. REIT stocks fit this. 2) companies with a high earnings growth prospects but a below market P/E." I agree with this, but find although all 8 stocks they recommend have low P/E's, but only the three I mentioned have what appear to me other positive investment qualities.
So I guess I was a little disappointed with Value Advisor. When I look at those 3 stocks which would meet my initial investment criteria, the follow-on question is, "Would I buy them?" The answer is no because they are fairly ordinary companies. There are many good companies out there, but the companies I look to buy stock in to either get rich or put a lot of little neices and nephews through college are:
Companies which are on the cutting edge of the changes going on in society.
Companies with innovative approaches to old problems.
Companies with critical niches in their fields.
Stocks I own are those like XON which I have suspected for many years of having a desire to rule the world in the oil industry. *laugh* Cut off oil to the world and everything shuts down...so XON is well placed. Another one, WDC is on the forefront of technology... riding the crest of the wave. A third one, GNT is an extremely innovative financial company with a balance sheet that brings tears of happiness to the eyes. Sooner or later it will rocket since it has been sitting domant for a while yet making superb earnings.
Anyway, I like your investment style, Chris. I have been impressed with the companies that you have found and espoused, TGIS and LGS because they meet my criteria for investing. I think LGS in particular is an aggressive company poised to take superb advantage of the problems that lay ahead for computers at the turn of the century. TGIS with its innovative ideas can get me excited too.
Take care, Chris! Sincerely, Denise
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