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Patience Technology Experience
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Patience Technology Experience

When we identify companies that meet our criteria, we determine our target price for the stocks using methods similar to those in valuing privately held companies. Two factors determine whether we want to own a stock - the difference between the price and "worth" we calculate, and the price at which the stock is selling, and our estimate of how long the differential is likely to last. The process develops as follows:

  • An investment idea is identified. Sources of investment ideas include:

    • Access to several computer databases and screens

    • FactSet Research Systems Inc.

    • First call database

    • Prudential Securities data base

    • Brokerage research

    • 'P01 investment banking relationships

    • Direct business Industry relationships

    • Relationships with other investment managers

    • Seminars, conferences, and "road shows"

    • Company visits

  • The idea is researched via various resources, including:

    • Review by investment committee

    • FactSet statistical summaries

    • Screening of data bases

    • Review of extensive universe of company files

    • Acquiring all public S. E. C. filings of the target company

    • Acquiring quarterly filings, 10K or 1OQ

    • Review of price relative to dynamics of business based upon street research, contacts with management, and company visits

  • A watch list is developed of 30 to 40 purchase candidates that meet BCM criteria. Review of candidates includes: 

    • Comparative analysis to industry peers

    • Monitoring consensus earnings expectations

    • Maintaining dialog with influential Wall Street analysts

    • Setting of a target purchase price

  • Purchase decisions are based upon 

    • Setting a price objective and time horizon with an initial investment position

    • Favorable developments that could justify both raising the target and purchase price

    • Seed positions that provide a special opportunity

    • Individual portfolio requirements

    • Some of the best decisions have been not to buy

  • Sell disciplines are based upon: 

    • Reduced weighting

    • Price objectives that are met

    • Changed circumstances that make our target no longer viable

    • More attractive investment opportunities

    • A security becomes a strong candidate for sale if it declines 20% from cost
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Blair Capital Management and H.Beck, Inc., are not affiliated