Jeffrey Bash: YES. (re: reliving '73-'74 market). Starting to get cold sweats thinking about it again. Problem with owning value stocks now in such a climate as '74 is that everyone who is anyone in the press is negative, people are indeed burned and burnt out, and you can buy (I am giving guesses here,not facts) GM for maybe 3x cash flow, AEXP for 8x pe, XRX for 6 pe with a 6% div, food co's (they're "safe" at pe of 9),Merrill (if it wasn't bot out tomorrow -g-) for maybe 7x pe (with expectation for no earnings for 2 years),REITs (that haven't folded) for 15% yields ('cause everyone thinks their div. will be cut - and they often are cut), etc. etc. And the guys who were sooo right about shorting the market -- they covered way long ago and mostly didn't make what they could have (unless they were so stubborn they never sold in any of the bear rallies). (Everyone thinks these guys would be gloating or at least happy that the market has tanked. But they aren't because everywhere they look they see pain - theirs, their neighbors, TV, etc.)
So why - in such a market - would anyone hold - let alone think of buying - SWR, SJP, or any alleged value stock? The ans. is they don't - they don't want or hold. That is why it is so important not to be overinvested now, to realize that there is a margin of safety only - not a guarantee - with value stocks, to be diversified, to have patience and staying power to realize that these are businesses we are talking about(not just pieces of paper), to give these business time to work their stuff in a country of great opportunity. ..... Ahh sorry...mostly intended for myself -- don't mean to lecture ... starting to get scared in this environment too....and got to fight the chattering monkeys sometimes -g-. Paul |
