redbaron

Asset Allocation in 2009: Best to Go with the Devil You Know

I should also add that I was not wise enough to buy at the lows on the list of small cap value stocks shown above, but instead bought on the way down before the bottom. Regardless, the positions have still done very well. (So Far!)

If there is a lesson, it is that small cap low-priced, value stocks will usually outperform in a recovery phase of the market. In addition, one has the January effect that can also add to small cap value stocks performance in the first part of the year, and also the nice dividends that most of these stocks still pay.

Asset Allocation in 2009: Best to Go with the Devil You Know

My group of small cap value stocks have all done better since the 11/20 bottom than the stocks on your list. I own Baldor (BEZ), Carpenter Technologies (CRS), FLOW International (FLOW), Joy Global (JOYG), Layne Christensen (LAYN), Manitowoc (MTW), Timken (TKR), Tyson (TSN), Archer Daniels Midland (ADM), Alcoa (AA), Ultralife Batteries (ULBI), Twin Disc (TWIN), and a few others. Many of these have already doubled, but then low priced stocks will always out-perform from an 'initial' bottom.