I would like to thank the market for being stupid again. 

Barely six months ago Mr. Market, you were telling me that agriculture stocks should be rising 2%-3% a day. Now, those stocks are down 60%-80% in half a year.

And what about coal?  On June 19, Patriot Coal was $82.  Today, PCX is $9.

Mr. Market, sometimes you are an idiot.  Perhaps you should trot on down to the pharmacist and pick up a prescription for lithium.

Now there are stocks selling below their net cash value.

I have been buying a basket of these stocks as of late.  These include

Avanex
Ticker – AVNX
Share price – $1.61
2007 share price high – $35.70
Decline – 95%
Shares outstanding – 15.5 million
Market cap – $25 million
Cash and marketable securities – $45.8 million
Debt – $0
Net cash – $45.8 million
Cash / market cap – 182%
Issues – Lousy quarter.  Cash burn of $9 million last quarter.

O2Micro
Ticker – OIIM
Share price – $2.18
2007 share price high – $18.00
Decline – 88%
Shares outstanding – 37.5 million
Market cap – $83 million
Cash and marketable securities – $107.1 million
Debt – $0
Net cash – $107.1 million
Cash / market cap – 128%
Issues – Leveraged to consumer spending.  Based in Taiwan and everyone hates China right now.  (See opening comments.)

SiRF Technologies
Ticker – SIRF
Share price – $1.25
2007 share price high – $34.15
Decline – 96%
Shares outstanding – 62.5 million
Market cap – $76 million
Cash and marketable securities – $100 million
Debt – $2 million
Net cash – $98 million
Cash / market cap – 132%
Issues – In a legal battle with Broadcom over patents.  Exposed to the consumer and the automobile industry. 

Tundra Semiconductor
Ticker – TUN.TO
Share price – C$3.15
2006 share price high – C$18.80
Decline – 83%
Shares outstanding – 19.6 million
Market cap – C$62 million
Cash and marketable securities – C$58.5 million
Debt – C$0
Net cash – C$58.5 million
Cash / market cap – 94%
Issues – Based in Canada.  Is that an issue?

None of these companies are exciting companies and a few have serious issues.  I would not be surprised if at least one was no longer in business when we come out of this cycle.

However, during the 2000-02 bear market, buying a basket of stocks trading at or below net cash proved to be enormously profitable. A few did not survive but those that did went up 5x-6x or more when the economy recovered.