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Strategies & Market Trends : Value Investing
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To: Seeker of Truth who wrote (15184)8/14/2002 3:32:32 PM
From: Paul Senior  Read Replies (2) of 78570
 
Malcolm Bersohn:

Return on equity is not mentioned in Graham's "Intelligent Investor".

Return on equity is not discussed in Dreman's "Contrarian Investment Strategies".

There is a two-page discussion of ROE in Al Frank's "New Prudent Speculator". It ends with, "After we check out ROE, compare it with historical trend and rule-of-thumb levels, and check...what we have to pay for the equity and our return on equity, we have done all we need to do with this selection criterion." (p.48)

I checked my notes/articles on James O'Shaughnessy. ("What Works on Wall Street") I find no discussion of ROE. It's neither used nor discussed in any of his strategies.

ROE is one of the first things I look at. I use it like Al Frank does. Maybe there's an absolute requirement for an ROE threshold for you-- experts don't require it of themselves though from what I see. And as far as there "being something wrong with the situation", I find that normal going into a value stock. If there weren't something wrong, then the stock wouldn't be at a value price.
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Can you offer some stocks that you believe to be value stocks that meet your criteria?

Perhaps I'm looking at one now, HI (Household International)? Nice ROE, low price. Cheap.
And ...(venting here)... dag-nabbit, I was too darn slow and placed my orders for more HI this morning too darn low. And didn't move them up enough or promptly. There has been quite a drop and comeback in the stock today.

finance.yahoo.com
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