“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!
It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine–that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.”
-from “Reminiscences of a Stock Operator” by Edwin Lefèvre
Benj Gallander, President of the Contra the Heard Investment Letter was on BNN’s Market Call yesterday with host Mark Bunting to talk about contrarian investing.
Citing the nearly century old book “Reminiscences of a Stock Operator”, a thinly veiled biography of Wall Street Trader Jesse Livermore, Gallander says it is critical, especially in these times, to be patient. The Contra the Heard President says his average hold time is three and a half years, and this has led to portfolio returns that are virtually always in the strong double digits. Gallander’s portfolio is up approximately 24% so far this year.
One stock he has had to wait longer than that for is Richmond, BC’s Norsat (TSX:NII). Gallander bought Norsat in 2007 at $.65 cents, and has been under water on the stock since. But things are looking up, he says.
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On August 9th, Norsat reported its Q2, 2012 results. The company earned $2.77-million on revenue of $10.5-million, up from a loss of $274,780 on a topline of $8.6-million in the first quarter of 2011.
Gallander says he likes the improvements at Norsat because much of the company’s growth is organic, not just coming from its recent acquisition of Sinclair. Nonetheless, he points out a shored up balance sheet may put the company in line for another small acquisition soon. Gallander says he believes Norsat could quadruple from its current price.
Norsat, which was founded in 1977, designs and builds communications equipment such as antennas, portable satellite systems, microwave components, and maritime systems that are used in difficult environments. The company, which nearly went under midway through the last decade, was skillfully rescued by long time employee Amiee Chan, an engineer who became CEO in 2006. Chan put the company on solid enough financial footing to acquire coveted long time peer Sinclair Technologies early in 2011.
At press time, shares of Norsat were up 5% to $.42 cents.