RE: OSI PRR (price-to-research ratio) of 2.31.15 Jan 2022 19:30
Conor McCarthy, founder and editor since 1984 of the Techinvest newsletter, is a bit of a hero of mine.
The Techinvest performance record helps to explain why:
Techinvest Trader Portfolio 1
Starting capital (1.3.85): £20,000
Termination value (31.3.93): £462,874
Gain (8 years and 1 month): 2214%
Techinvest Trader Portfolio 2
Starting capital (1.3.93): £50,000
Termination value (30.4.96): £276,691
Gain (40 months): 453.3%
Techinvest Trader Portfolio 3
Starting capital (1.4.96): £50,000
Termination value (27.3.00): £570,402
Gain (4 years): 1040.8%
Techinvest Trader Portfolio 4
Starting capital (1.1.00): £100,000
Value 31.7.18: £758,763
Gain (18 years and 7 months): 658.8%
And his ten point, one page article "Technology stocks - attractions and dangers", that I quoted from and linked to this afternoon, is a template for making money from tech stocks.
In fact, it's well worth framing a copy and hanging it above your desk!
Some of the points aren't relevant to OSI, but those that are strongly support the investment case here.
Conor McCarthy's tech investment approach is based on the principles set out in the classic 1984 book "Super Stocks" by Kenneth Fisher.
This is the book that McCarthy recommends to his subscribers.
(And perhaps it also inspired him to start "Techinvest" the same year?)
A core approach set out in this book is to buy tech stocks after a glitch etc., at bargain-basement prices.
This often happens in a tech company's development phase, when the road to profit is typically longer than originally expected, and the share price falls heavily as a result.
It is this depressed price which allows for the abnormal returns of a Super Stock.
A Super Stock is defined to be both:
The stock of a Super Company bought at a price appropriate to an inferior company.
A stock which increases 3 to 10 times in value in three to five years from its initial purchase.
The most profitable tech share investments come in the form of young, rapidly growing companies that are currently out of favour with the stock market.
The stock subsequently becomes worth more as the company increases its sales, its profit potential becomes clearer, and the investment community comes to appreciate its true value, bidding up its price.
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