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Strategies & Market Trends : Value Investing
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To: TimbaBear who wrote (11891)1/17/2001 6:16:41 PM
From: rjm2  Read Replies (1) of 78628
 
The thing to remember with Net current assets is that the inventory (as well as other things) is often worth considerably less in a liquidation. So when you buy net-nets, like I did with DIYH, and they close stores, inventory only brings in the 65% range.

I think in Grahams day, he was buying old line companies for 2/3 NCA that were often also selling at low p/e's and such.
Today, we get stocks where there are serious concerns over the assets. Take FRDM for example. The market questions their entire business model and especially their recievables.
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