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Strategies & Market Trends : Value Investing
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To: Steve168 who wrote (17387)7/9/2003 10:49:11 PM
From: Paul Senior  Read Replies (3) of 78702
 
Steve168. Thanks for the update and your latest ideas. Diverse kinds of value investors inhabit this thread, so I'm sure at least a few people here besides me will be interested in seeing what you are doing.

These stock-below-cash plays (or what I've often called money-in-search-of-a-business plays) have rapidly diminished. I'm just guessing that that kind of value investing will disappear for at least a while. I base my opinion on my experience that it's been rare to see so many stocks below their cash value (and with no debt) as we've had in the past year or two. Just as it's been difficult in the past few years to find Graham net-nets (stocks at 2/3 of net current assets), I am guessing it will soon be difficult to find stocks-below-cash. Because we (and other market players) see now how profitable they can be. I'll guess it's likely prices will not linger much below cash for very long. (Investors will bid up the price.) (OTOH, if we've seen so many of these opportunities in '02 and '03, maybe we will see them again as the market fluctuates.)

If I am characterizing you correctly as primarily a cash-below-market investor now, I suspect you will either have to wait (a long time, I am guessing) for such opportunities to re-surface, or else you will have to change your investing style. So I'd also be interested in reading of the picks you choose if your value style changes.

Paul Senior
Sold 1/2 VICL today.
Have a small position in PCYC as posted. I'll consider adding more to it.
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