Finding A Winning Strategy

A.B.A.S.I. members use price limits to minimize losses and maximize stock gains

particular company. We didn’t want to start out buying stocks priced around $70 or $80 a share,” says Ransome. In addition to buying stocks priced at moderate values, club members decided not to purchase any individual stock that had a market cap below $100 million in an effort to invest in established companies. A stock’s fundamentals, such as its price-to-earnings ratio, market position, management, estimated earnings growth, and dividends were also taken into consideration.

Some of A.B.A.S.I.’s initial buys were Citigroup (NYSE: C), General Electric (NYSE: GE), Sovereign Bank (NYSE: SOV), and Microsoft (Nasdaq: MSFT). Those companies, along with Home Depot and Loews, continue to represent about one-third of the club’s portfolio, which is valued at $27,000 ($21,000 in equity, the rest in cash). The club currently has a total of 17 holdings, including the Harbor Capital Growth (HACAX) stock mutual fund.

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