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Strategies & Market Trends : Value Investing

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To: gcrispin who wrote (15763)	11/10/2002 5:11:22 AM
From: Bob Rudd	Read Replies (3) of 78750

I own CD and strongly believe you'll make money in it from here, though I can see Jim Clark's position...if you have to really understand how all the moving parts fit together, you don't want CD. It's not as big a 'black box' as IBM or GE, but the various transactions and a finance element make it tough to model. After Henry got screwed on CUC, he's really tightened up DD, to the point he claims they have done the most thorough reveiw of anybody out there on acquistions since CUC. The $1B hit he personally took an that disaster makes me think he's walking that talk. I like the mix of differing cyclicality of the various businesses...that produces a more stable cash flow. It's important to emphasise on the hotel side that the hotels they franchise are more aimed at 'road warriers' than air travelers, thus less likely to suffer as a result of weakness in air travel. Also, they own the brands and get franchise cash flows that are far more stable than owning the buildings...even somewhat counter cyclical since they get more sign-ups when times are tough.

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