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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (9804)	1/29/2000 11:20:00 PM
From: James Clarke	Read Replies (3) of 78481

I agree that MO belongs in a diversified value portfolio (If I had to lay out a portfolio of 20 stocks, MO would be one of them). I wouldn't make a concentrated bet on it though. Somewhere in Ben Graham's original Security Analysis he singles out legal problems as something investors nearly always overreact to, and where you should take the other side. Philip Morris is one of my favorite companies in the world - I used to love to trade the shares up and down with litigation. And I've been too scared to buy it (good thing too, because I almost pulled the trigger at 28). That might tell you this is a screaming contrarian opportunity, if you have the guts. I had the good fortune to spend some time with a former big-time Fidelity portfolio manager, who I will not name, about a month ago. One of his two best ideas was the long term calls (LEAPS) at 25 strike on MO. You might want to look into whether that might be a better deal than buying the stock outright. The risk/reward might have changed since then.

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