The Best Road to Capital Gains
by John Dorfman
Out-of-favor stocks are the best road to capital gains.
The results of the hypothetical portfolios published in my column have deepened my long-standing conviction that a value style is the wisest investment course.
For example, the so-called "Robot Portfolio,'' an annual collection of stocks with extremely low price-earnings ratios, has heightened my resolve to go against the crowd and buy stocks that are unpopular.
That portfolio contains the 10-lowest P/E stocks among all U.S. stocks with a market value of $500 million or more, debt less than equity, and positive earnings.
Over the years, this paradigm has pointed to fruitful opportunities.
The results of the hypothetical portfolios published in my column have deepened my long-standing conviction that a value style is the wisest investment course.
For example, the so-called "Robot Portfolio,'' an annual collection of stocks with extremely low price-earnings ratios, has heightened my resolve to go against the crowd and buy stocks that are unpopular.
That portfolio contains the 10-lowest P/E stocks among all U.S. stocks with a market value of $500 million or more, debt less than equity, and positive earnings.
Over the years, this paradigm has pointed to fruitful opportunities.
Tags: contrarian, P/E
