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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (2003)9/28/1997 11:11:00 AM
From: Ron Bower   of 78673
 
Paul,

I thought I could learn something by going back thru the list of successful stock picks that you posted. I wanted see if I could figure out what made those stocks good value buys at the time they were posted to the list. Using end of '96 numbers as a basis for stocks picked in March. I didn't look at all, just some of the big gainers.

The only thing that even came close to a 'Value Buy' was REAL selling at 1.5 BV and a PE of 6. The rest were at high PE & BV multiples then and are at much higher multiples now.
TLC stands out as a major deviation from criteria for Value Stocks.
PRMO, the winner on your list, was selling near BV, but had a -.15 EPS then and -.27 now. What justified the price going from 6.5-15?

With the exception of REAL, the stocks I looked at from your list have done little to justify the price increase and, as near as I can determine, had little to offer as Value Stocks in March.

I applaud the good picks and the profit gains made, but didn't learn much about picking stocks on value.

For what it's worth,
Ron


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