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SSKILLZ1 Member Level  Saturday, 09/17/05 03:01:48 PM
Re: dickmilde post# 22684
Post # of 171394 

Holding Period: On the regular value microcap index, the stocks are held for a period of a year, before I readjust the index in 2006. On the rebalanced index a stock can be held for as little as a month, or for the whole/several years, depending if the stock still fits the criteria. Remember rebalancing can happen at the end of the each month, if I deem it to be necessary

Objective of indexes: These indexes have been created to be a microcosm of the boards picks.

Requirements to get into the index (same criteria is used for replacements as well).
1) Numorous board memeber recognize the stock as a value investment.
2) The company must have earnings for at least the latest quarter, and once the company is in the index, if the PE climbs do to a runup starts hitting around the 20-25 level I generally replace it, because I don't perceive it as value any more when it is trading at around 25 times earnings (in general).
3) Companies market cap although not as strict if it is a couple of million over, has to be below 500 million.

How to get kicked out of the rebalanced Value microcap index.
1) The stock goes up too much and trade at a ridiculous pe, and can no longer be perceived as value, using any valuation metric, not just PE (Is somewhat subjective, I admit, but haven't thought of anyway better to do it).
2) Company gets taken over, we are not arbitraigers here, once the company gets taken over an example is OHRI.ob it is gone during the next rebalancing period.
3) Company starts reporting losses, sometimes when we put a stock in an index they were profitable when they started, but soon after the company incurs problems, and starts reporting losses, a company losing money cannot be perceived as value under any circumstances, so those kind of stock generally get kicked out of the index.

---Hope this helps.---

---All above is just my humble opinion.
And I could always be wrong.
And as always do your own DD.---

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