With the Nasdaq setting a new 52-week low (down below 3000) and the Dow below 10,500 we can only be optimistic
about the business progress of the companies in our Model Portfoilo. In the past month the performance of CheckPoint
Software Technologies, a stock that is priced for perfection, has fallen by one third of its value, nearly $60 a share. "Oh
Tempores O Mores" (the times and the customs) said the Romans. CheckPoint is a company whose results over the past
two years have always exceeded analysts' expectations. Moreover, the company now holds more than 50% of the global
market for internet security products. Sticks and stones may break the bones but words uttered on Wall Street are even
more destructive. Perhaps, the fall in Nasdaq has come about due to the comments and reports from Wall Street
analysts' with their worries about earnings, the uncertainty about the outcome of the American presidential election or
even about the Middle East violence.
One thing is clear that when the Electronic Herd begins to sell it attracts followers.
Seasoned investors apply the use of options to lock in their profits but this is not recommended except for professional
investors or seasoned money managers. We believe that we can best serve our subscribers by pointing to emerging
changes in the business direction of the portfolio companies. Another way is to drop a holding which we believe loses its
edge due to competition or inability to carry out its business plan. That is not to say that the portfolio is only useful for
the value/long-term investor. When we introduce a new holding as we recently did with Precise Software, it indicates
that we believe that it is a timely inclusion. A speculator could consider our move as good entry point. The traditional
November rally has been frittered away for the reason mentioned above. US tax selling may put additional pressure on
Nasdaq prices but we are now carefully looking at shares which represent good long term value at prices which are
knocked down from the spring of 2000 levels.