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Strategies & Market Trends : The Round Table: A work by the squares of the SNDK thread.

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To: Ausdauer who wrote (11)	2/26/1999 12:56:00 AM
From: Ausdauer	of 194

The Round Table Ausdauer's Investment Strategy (page two) My initial investment in SanDisk early last Fall marked a significant step for me. In the past I had invested in companies I heard about through work that had exciting products. I did this with little insight into what made these companies fundamentally successful or worthy of investment. As a result I had some winners and some losers. One painful loss told me that I needed a disciplined approach to investing. I could not imagine losing as much money as I did in such a short period of time all over again. By reading about investment strategies I created a false sense of security. I felt that somehow I might be shielded from any further misadventures. I was wrong. I learned that even the best researched investment can become derailed for any number of reasons, seen or unforeseen. SanDisk was my second painful lesson in investing. It taught me that even a seemingly fantastic investment opportunity can become a nightmare. I have discussed my tribulations on the SNDK Thread already and will not repeat them here. In the past several years my interests have evolved into a combination of two investment philosophies: value oriented investing and the concept of growth at a reasonable price. Value Investing: Being a cheapskate at heart the notion of investing in a company that has reached some fraction of its measurable value was appealing. The biggest problem I faced was realizing that value investing was never really designed for small capitalization companies (particularly not those in the high tech industry) prone to being tossed around by the volatility of the market. Second, value investing required a) locating a company that had essentially been abandoned by the mainstream investor, b) making some rational assessment the value of its skeletal remains, c) waiting for the price to fall to a final resting point, d) investing, e) believing you had found some redeeming quality missed by everyone else, and f) then waiting for the stock to be rediscovered by Wall Street. This strategy requires a lot of patience. You have to get used to not talking yourself out of the investment as you sit and watch the stock price firmly affixed in a trading range at or below your entry price. This is especially hard in the middle of a bull market. I now feel that value remains an important feature, however growth at a reasonable price couple with some measure of value is a better general approach. I read The Motley Fool Investment Guide and enjoyed the chapter which outlined the approach to investing in small capitalization growth companies. It presented a useful exercise that I have committed to memory. This consists of applying 8 requirements to any potential investment. They are as follows: ¤¤¤¤¤¤Please page forward to the next post¤¤¤¤¤¤

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