Ryan Jacob rode the dot-com craze to incredible triple-digit-return highs and then, when the market crashed, lost 90% of investors’ money. Now Morningstar rates the Jacob Internet No. 1 in the technology sector for the past three and five years, Registered Rep reports.
Jacob said he’s been able to attain that achievement by going after value stocks, even though that’s rare for a technology fund.
“Investors in our sector are so short-term oriented that it causes certain companies to trade well below what we think the intrinsic value is,” Jacob explained. “It adds to our performance, and also gives us a little more diversity and downside protection.”
He also attributed his strong performance to high portfolio turnover and expanding his holdings from 20 to 30 stocks to 40 to 50 stocks. These actions, he said, “mitigate volatility and manage risk better.”
When investing in growth stocks, Jacob looks for companies that have established themselves and are expanding their market share in large markets that have high barriers to entry, and that have a strong management team. On the value side, Jacob said, he looks for “companies that have a lot of cash relative to market capitalization, trade at very low price to sales and have a unique product or technology.”
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