An Update for Cheapskates
About a year and a half ago, I introduced Real Money readers to my JIMS CRAB FEST portfolio for cheapskates, a somewhat eclectic mix of names that had a few things in common. First, they were small companies with market caps ranging between $200 million and $3 billion. Second, they were all asset rich, trading at very low multiples of net current asset value (averaging 1.5) and price to book (1.1), with little debt and lots of cash. The objective was to build a list of small, cheap names and track it over several years to judge whether this approach had any merit.
Of course, there is seldom instant gratification when you buy names with the attributes listed above. But over time, value does pay off. Nearly 17 months into this experiment, the JIMS CRAB FEST portfolio is up just over 16%. While that's not exactly shooting the lights out, it is considerably better than the Russell 2000 Index's 6.8% gain, the Russell Microcap Index's gain of 5.6%, and S&P SmallCap's 11.9% advance in the same period. It's too early to declare victory, but I am somewhat pleased with the results so far....419 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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