Just made SAP 20% of my portfolio, bought at 31.
I buy companies that are:
1. the best in the world at what they do
2. I expect earnings to grow at 20% or more per year long-term, based on continuing to do what their track record proves they can do. That is, I go on track records, not hope.
3. good balance sheet. Cash>LTD
4. nothing major on my long list of "stupid things companies do".
5. I wait, sometimes for years, till the sector goes out of favor, and all the companies have sold off. I like to see a double bottom, or a basing period of several months, to get some assurance that all the momentum guessers have given up on the stock, and only long-term value investors still hold it. Then I take a large position and wait.
For instance, I bought CSCO in 4/97, INTC in 6/98, AMAT in 8/98, SLB in 12/98. I think SAP fits on this list. And I hope this double bottom holds. |
