This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kass: There Is No Secret Sauce

I use my purchase of Altisource Portfolio Solutions (ASPS - Get Report) in late 2009/early 2010 at about $15 a share as an illustration of the value of fundamental analysis. Altisource was spun off from Ocwen Financial (OCN - Get Report), and I spent about 75 hours researching the company. I devoured the company's financial statements. I had discussions with management and with the company's competition. As well, I spent a great deal of time talking to regulators and bank managements, which would ultimately provide the fuel for Ocwen's and Altisource's profit growth via the necessary disposition of their mortgage-servicing portfolios.

There was no chart at all to deal with when I purchased the shares of Altisource at $15, but I came to the analytical conclusion that the company had the potential to earn $5.00 to $6.00 a share a few years out (2012), or only 2.5x what I was paying for the stock. The rest is history, as the shares rose to over $100 a share in less than three years.

Fundamental research, when done properly is hard work -- done well, it takes time. I research companies, hopefully, in a hard-hitting, analytical way, and I often look to develop variant views from consensus (on both shorts and longs).

I choose not to utilize technical analysis in a meaningful way in my stock selection and decision-making process, however, as fundamental analysis (as a dominant determinant) just works for me. Technical analysts feel the same way in not adopting fundamental analysis, and I respect their views but deeply question decisions that are made solely on a technical basis or that are based on algorithms and/or pattern recognition.

Though technical analysis is only a small part of my investment decision process, I do refer to the charts, and when I do, I want to hear from someone such as Tim Collins, as few do it better than him. Tim is in the class of my favorites, which also includes the Helene Meisler, Justin Mamis, Bob Farrell, Jeff Hirsch and Walt Deemer.

I keep charts, algorithms and historical pattern recognition in their proper perspective -- and so should all of you.
At the time of publication, Kass and/or his funds had no positions in the stocks mentioned, although holdings can change at any time.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Real Money
Try it NOW

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs