Forbes: Can you describe your investment strategy in this type of market, and is it the same strategy that you chronicled in your book A Random Walk Down Wall Street?
Paul Singh, a partner at the seed stage firm 500-Startups, effectively articulates the market forces driving this investment strategy in his Money Ball presentation.
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In a bull market you can usually get away with this risky strategy.
This market-timing strategy is commonly known as Sell in May and Go Away because the exit period is May.
In this environment the prudent investment strategy is to raise cash on additional market strength even as the major averages trade to new multi-year highs and all time highs.
And I had taught leadership from a strategic perspective for a decade and knew much about how to integrate leadership with strategic positioning in the market and how to build an organization that was aligned with this strategy.
We believe management is running the business essentially at break-even as a matter of design while the company reaches for ever-expanding market share, and we think marginal investors will continue to lose patience with this strategy in the medium term.
"The reforms we are making to the electricity market through the Energy Bill and through our gas generation strategy are aimed at plugging this gap in order to keep the lights on, " he added.
Having a high market share helps this strategy because it provides a financial incentive for third-parties to fill in features that might draw customers to competitors or add new ones (like car stereo integration) that are difficult for competitors to match.
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The change in strategy comes as the yen's dramatic decline early this year has paused, suggesting the Japanese stock market may be less dependent on the direction of the currency and tied more closely to the strength of an economic recovery in Japan.
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