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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (40649)	12/17/2010 12:34:38 AM
From: Shane M	of 78686

Jurgis, re: lost decade I agree with your point wrt Price, and cyclicality could be reason for severe multiple compression we see on these right now. I've been interpreting these - esp MSFT - through more of an ongoing growth story lens up to now, but based on your comment I agree cyclicality could be a big part of why the earnings multiple is so compressed right now. I guess the thing to me is not to say these companies don't have issues/concerns, but have they been discounted too far? To me they're stocks that could easily deserve a market multiple, or close to it - and that's a large basis of my interest. And I'm not even targeting for them to get to market multiple. Just trying to pick up 15-20% of the potential/possible increase in value. I gotta admit though - cyclicality could very well make today's relatively low multiples look more average or possibly even high if eps and rev gro falls off going forward. You could easily be right if these are in fact companies in decline w/ unsustainable metrics. Thanks again for your thoughts. You ask good questions and pose good alternatives.

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