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Strategies & Market Trends : Value Investing

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To: rjm2 who wrote (13343)	11/19/2001 10:54:49 AM
From: Bob Rudd	Read Replies (1) of 78691

DIYH: I don't have a dog in this fight, but you asked for feedback...Looks like the key issue is what they get in liquidation vs book. I suspect inventory goes for .20 on the $ or less after costs. Lumber in May June, when they announced liquidation was peaking...now down a 1/3. What do inside players get out of the end game [recall what Buffett said about poker games]. Property...a vacated homequarters locally [Michigan] sat empty for about 3 years...it didn't have lumber sheds [I don't know what DIYH's look like] and so was easier to convert[ended up as Car showroom] and was in a very high traffic location. Other vacated large home centers have also been slow to move [years not months]. Lowe's and Home Depot's don't usually buy/lease these...they build to get just what they want. My read is that even if it's got a lot going for it, these pigs are tough to move...unless offered at 'market clearing' price...read real cheap. Paul has wisely cautioned several times on this thread about taking heavy positions in microcaps. I've ignored that caution a time or two and been burned for it. I hope this one works out ok for you.

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