OK, here's where I go and offend a lot of people. Religion? Style? What's the difference? I'm sitting here fully expecting AMZN to go to 10. Don't expect incredulity from me just because I haven't seen it happen before. At some point, I did give up on my tech ban. Reason being that they are businesses like any other, and I couldn't justify not valuing them. It's fashionable for value investors to steer clear, certainly because of Buffett's influence. But it is possible to invest intelligently there, IMO. I can't just stick my head in the sand and say Microsoft didn't make a lot of really intelligent investors very wealthy. Ratios bite. That's gotta be lesson number 1 in tech value investing. I learned it with one stock - Creative Labs. Applying a little bit of Buffett to tech isn't heresy or impossible, IMO.
On Novacare, it doesn't seem like it is too hard to get a grip on it. But basic Yahoo ratios won't do it. The book value is basically all goodwill and crappy AR. In fact I would argue a conservative estimate of book value is nigh near negative, if not blatantly negative. It seems it all comes down to what that last remaining business would earn, and how much somebody else would pay for it. One could even just make a bet that Medicare funding of PT will indeed be increased, and know that the day it happens, NOV will jump at least 50%. Not necessarily a bad bet. I guess this would be a workout.
Mike |
