I just read that Warren Buffet underperformed the market in 3 out of 4 years during the 70s. During that stretch he underperformed by a cumulative 47%. Yes, forty-seven percent.
That would be enough to make many people quit investing. However, when you’re investing properly, underperformance is an inevitable risk and occasional occurrence.
The reason is simple — outperformance cannot come from doing what everyone else does. That’s called “being average”. Sometimes, the pursuit of excellence requires decisions that can create short-term underperformance (and let’s face it, four years is “short-term” in the context of an entire life).
To be rewarded, the world usually has to wake up to what you’ve already known. This can take weeks, months, or even years. Fortunately, those periods are usually followed by periods of incredible outperformance.
As we enter 2017, my primary focus is back on stocks (versus the 2015 legal wrangling and my 2016 Track & Field campaign). The timing couldn’t be better. I’m finding some great bargains (especially compared to the elevated valuations I’m seeing in the broader market).
Stocks like Mattersight (NASDAQ:MATR), RADCOM (NASDAQ:RDCM), Radisys (NASDAQ:RSYS), Cal-Maine (NASDAQ:CALM), Hudson Technologies (NASDAQ:HDSN), and Marin Software (NYSE:MRIN) all have enticing prospects at attractive valuations.
To profit from this, we just need to be right on half of them and patient until the winners take off. Remember, a triple + a 50% loser = a 75% total return.
As my research ramps up, I’ll continue to share my findings and actions. In fact, on Friday afternoon, I made a number of moves in my always-viewable 1% Portfolio.
Among them, I doubled down on Marin Software . I have released a YouTube video to discuss all of my moves and why I think MRIN could eventually triple from these levels.
Could it go lower first? Of course. That’s always a risk. However, this 30-minute video goes into great detail as to why MRIN is more attractive as it goes lower.
In other news…
The Mobile World Congress has been going on. RADCOM is among the vendors there and CEO Yaron Ravkaie was interviewed. The video is just a few minutes long and great for understanding or reinforcing the role RDCM is playing in the modernization of carrier networks.
Have a great week!
The information in this article is for informational and illustrative purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action. The opinions expressed in Pipeline Data, LLC publications are the opinions of Mr. Gomes as of the date of publication, and are subject to change without notice and may not be updated.
All investments carry the risk of loss and the investment strategies discussed by Mr. Gomes entail a high level of risk. Any person considering an investment should perform their own research and consult with an investment professional. Additional important disclosures can be found in the Important Disclosures section at PipelineDataLLC.com.