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Strategies & Market Trends : Value Investing
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To: James Clarke who wrote (6559)4/3/1999 9:18:00 AM
From: TimbaBear   of 78656
 
In post 6557 one of the things you said was.... "Is the debt fixed or floating? In JRC's case half of it is floating. If there is anything to worry about here, that's it.".... My response to you was based on that and my thoughts were directed to how I might approach evaluating future strains on JRC's cash flow caused by interest rate fluctuations for the debt you were referencing....I realize you have more experience in evaluation than I do, so you already probably do something like "What if the interest rate on that debt shot up suddenly" calculations....I know in this era of low inflation that that kind of scenario seems far fetched, however, with rumors of Mr. Greenspan maybe not getting re-appointed and with Mr. Rubin wanting to leave, and the mounting inflationary pressures of low unemployment and possibly continually rising oil prices....I am not comfortable with the notion that "Goldilocks" will last forever....the inflationary spiral is especially difficult on highly leveraged companies with a substantial portion of their debt at variable rates....Since this thread appears to be geared toward investments held for the longer term, inflation in interest rates, IMO, needs careful thought....you already know this so my post was probably redundant.
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