Jim, I don't agree with you.
I'm one who's not reading any of your short selling recommendations. My general observation is that it's a loser's game for any amateur investor to say,"gee, the market is so high, and some stocks are so obviously mispriced, ergo I'll just simply reverse the process and start shorting some of the most egregious examples." But as I've said before, my opinion is, the only way people are going to learn that you will not make substantial money through shorting is to short, short, short. -g- Then you'll see it for yourselves.
I will argue again for UAL. UAL is strong in the Asian market. Asia is coming back. UAL trades at a relative low price to book value. Fund managers with positions in UAL include Dreman (per Bloomberg Dec '98) and Marisco (p. 170, Fortune, 7/19/99).
For AMR you say to back out TSG. TSG is trading now at 31x eps and about 8x book value. Trading in a yearly range between 23 and 72, now about 63, what value do you ascribe to TSG? When I posted here that I was buying TSG @ 27, no one commented that they thought it was a value at that price. When it was about 35 and reported lower earnings, the stock dropped sharply back into the 20's. So for me, I will have some difficulty valuing TSG anywhere near 60.
I also challenge the conventional wisdom that AMR is the best managed of the large airlines. Crandell may have been the smartest of the bunch (hub systems, frequent flyer programs), but he's gone now. Meanwhile AMR still has plenty of challenges facing them - employee pay scales, South American routes, troubled alliances.
JMO, Paul (long BAB (British Air) and UAL) |
