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Strategies & Market Trends : Value Investing

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geoffrey Wren

To: geoffrey Wren who wrote (57058)	3/23/2016 9:41:27 AM
From: E_K_S	1 Recommendation Read Replies (1) of 78748

I recall years back in the 90's one of the disk drive companies was shipping bricks in their boxes. The clue was watching their inventory and when they recognized their revenues. It actually took someone at the warehouse loading dock to notice what was actually being shipped. These fake sales came at the end of the month when the company was trying to meet their booked revenues for the quarter. Oops! For value investors that look at BV, look at tangible vs intangible assets. If inventory makes up a large chunk of those BV assets, see if it is liquid and/or stale. It may only be worth 50% of the stated BV. I like real estate assets in the BV and many times it is understated depending on when they actually bought the property. Also watch those one time charges that turn into several quarters of one time charges. I am quicker now to book gains and exit a position when I start to see these recurring one time charges especially from a new management team. The other thing I always look at is their corporate address. If it is a Chinese company I will always pass as there are just too many other companies to Buy/Sell. EKS

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