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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (30863)	5/7/2008 12:01:57 PM
From: Jurgis Bekepuris	Read Replies (1) of 78628

ACAS - I am not sure why so much rejoicing at the announcement. I looked at it and all I see is that the company is becoming even more impossible to value for an outsider. It's now totally "faith" based investment based on management claims. Well, most of BDCs are such investments, so it's not really a surprise, but why should I be happy about it? In short: there is no ROE since we have writedowns, P/Book is also not "clean" due to the management claims that the "GAAP" prices of the assets are way lower than "real" prices. I am considering selling. The only reason I hold it is that it's pretty obvious that macro-wise financials are cheap. Even Munger said something to that extent which is like Buffett commented is the most optimistic he has heard Munger to be for ages. ;) I wonder though why I should not swap ACAS into Buffett's WFC/USB...

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