Jim, Glad to see it working for you. Me, look at what I just did today (because it would seem that I have lost the 'net net' faith, though I don't believe so):
Sold Disney, PECO.
Bought Washington Mutual, Ross Stores, Ethan Allen, more Clayton Homes, more Tricon Global. Two days ago, I bought Philip Morris.
I feel like a kid in a candy store. There are quite a few values in the market, IMO, and I don't feel the need to play net nets. The stuff I'm buying passes EVA muster at the same time it passes various other value criteria IMO. This of course raises the question whether I would ever play net nets at a true market bottom. My strategy with net nets is the opposite of what Tweedy Browne found (they having found that it was the money-losing crappy businesses that were the money makers for net net investors). Rather, since I am not playing the tried-and-true diversified approach to net nets, I'm only buying net nets when I see "corroborating value" in the story/cash flow/earnings/potential/insider activity/whatever. EBSC I own now, but for different reasons than you might think. After buying, I realized it is not really a net net when you consider the operating leases. There is corroborating value though, so I held. With LKI, an updated 10Q revealed it wasn't a net net, and I couldn't find corroborating value, so I sold. With General Cigar, I was up to my ears in corroborating value no matter what the inventory really was worth.
Good investing,
Mike |
