Hi GHowe,
Money talks, after analyzing the MFNX/ABOV marriage I bailed MFNX. Of course I couldn't help myself and reentered when the GTR started coverage. Now I'm flat again. I am completely ambivalent about this one as an investment. However, I think that over the longer term, that the combination is compelling, as an ongoing business.
As regards WCOM and EXDS, it seems that a comparable may have been the attempted purchase of AltaVista by Barry Diller. Of course Diller is spending old currency and hasn't quite come to grips with the new I-nut currency. I don't know where Ebbers comes down on this, but I do know there isn't a chance in a million that WCOM and the other old tech crowd can do in EXDS. Ellen has the wind at her back and they will do just fine. Not as spectacularly for the patzer investor as in the past, but it won't be an "X" either.
As to your grand theory of finance question: "Could these others be worth that much...?" Of course utilizing the methodology of the beancouter, one would conclude no, they could not possibly be worth that much. But the salient question to ask is, would another willing buyer step up to the plate and take a swing at these. And the answer, for the last 3+ years has been overwelmingly in the affirmative. A market is made up of participants and not principles. At least that is how I've accomodated my formerly far more skeptical mind to what is going on today. Remember, there is a wall of money being generated every day in the world economy. It is surplus to the current needs of economic man. It can and will drive prices to levels that many will consider insane. They will be the ones left at the station as the prosperity train rolls on. This is not hard and fast financial analysis, obviously, what it is is a hard and calculated look at the reality of vastnesses of liquidity and oceans of wealth that can be created, as if out of the magician's sleeve.
I always like to recall what Warren Buffett had to say about his mentor Ben Graham, in discussions like this. When asked recently if he still followed Graham's advice, Buffett quipped: "When I started investing I had about $10,000. If I had followed Ben's advice, I would still have about $10,000, 30 years later." Until quite recently, I would use the "Security Analysis" tools to try to figure the worth of an investment. Not any longer. Now that text seems no more than a historical relic, and a misleading one at that.
And that's my 2 pennies worth.
Question: Why do we still have such a useless relic as the copper penny? Because the U.S. Treasury Department makes $0.003 on each one minted. A real profit center there now.
Ciao, Ray |
