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Strategies & Market Trends : Value Investing
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To: jeffbas who wrote (2852)12/22/1997 10:34:00 AM
From: James Clarke  Read Replies (1) of 78669
 
OK, I see what you're saying. Obviously a gold mine is not worth the value of the gold in the ground. There are extraction costs and time value of money to discount. But it should trade at the value of other similar gold in the ground. Compare apples to apples. All I am saying is that you can buy St. Joe at a deep discount to the value of its assets. As long as the company is moving in the right direction to create shareholder value, I don't much care when they sell the assets. Florida land is probably going to keep appreciating. Don't read St. Joe as a liquidation story any more. Now its turning itself into a developer, for which the net asset value could be treated as a floor, with the value as a company considerably higher.

The thing is, we only hear about the "asset plays" that trade at big discounts. There are plenty of others trading at premiums or at the value of their assets. But in investment lingo, we don't call those "asset plays".
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