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There's a lot working against investors right now. Despite the recent declines, stocks still aren't all that cheap, and the economic picture is hazy.
But even in the best of times, trying to predict the market's direction is a terrible idea, says Craig Hodges, who manages the Hodges fund in Dallas with his dad, Don Hodges; he'd rather focus on the strengths and weaknesses of individual companies.
What's your strategy now that it looks as if we might be in for a choppy 2007?]
We're a big proponent of pricing power. What allows a company to maintain or even increase its prices is a lack of competition, high barriers to entry and good demand. PC makers can never have pricing power because there's too much competition. Instead, we focus on businesses like railroads and steel, where there used to be a ton of competitors and now there are just three or four.
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