How do you invest?
I'll be honest: it feels a little weird to blog. Airing your thoughts as though someone actually cares takes more than a little dose of hubris, I think.
Nevertheless, blogging is a cool idea when it comes to CAPS. How better to gauge the prevailing winds blowing through a community of 15,000+ investors than to read the raw thoughts of those participating? The pure power of the idea compels me to participate.
But let's start small, with one simple question: How do you invest? Do you like stocks that trade at historically low P/Es a la John Neff or the Sound Shore Fund? (Sound Shore, incidentally, is a favorite of mine: http://www.f...06091428.htm)
Or do you prefer beaten-down stocks that are suffering from a temporary blast of bad news a la our Foolish admiral Philip Durell? Higher-octane stocks that possess the potential to double in three years or less? Small caps? Large caps? Fool caps? You get the idea.
I ask for two reasons. First, because I'm curious. Second, because I have a theory about what sort of investor makes a Fool. I'll reveal my hypothesis in my next post, after reading your responses.
In the meantime, here's a short description of how I invest.
First and foremost, I like cash. My best investments (Akamai, Oracle) are businesses that produce big wads of cash each quarter thanks to easily identifiable competitive advantages. Well, easily identifiable for me because I've studied tech for so long. For the market, the real cash-generating power of each of these stocks was widely misunderstood for a loooooooong time. Short interest was high and the P/E and PEG ratios were either stratospheric or nonexistent. Yippee!
Seriously. I don't think there's any real profit in stocks that are easy to follow. Go with your edge. Mine is tech. And growth. What's yours?