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Strategies & Market Trends : Value Investing

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Lance Bredvold

Winfastorlose

To: Nya_Quy who wrote (62928)	12/1/2019 11:11:15 AM
From: bruwin	2 Recommendations Read Replies (1) of 78470

" .. perhaps you are interested in taking a look at it" I, for one, did. And I often wonder why it is that there seems to be this fascination with "players" in the stock market about buying into companies that have had prolonged periods of Losing Money. If a company cannot make a regular profit then what's the point in it continuing in that line of business ? Are serious investors really going to be attracted to a Loss-Making organization ? There was much in your write up about FCF and EV, etc, but virtually nothing about ongoing Net Income Loss and the CONCURRENT Retained Income decline. . One sees a fairly stagnant and slightly declining Total Revenue. But after all is said and done there are ongoing Bottom Line losses. And all the FCF's and EV's aren't going to change that. And then we go to the Balance Sheet ..... ....... and not surprisingly we see a DECLINE in Retained Income. Now you referred several times to share buy backs. But from which "pool of Assets" does a company go to to buy back its shares ? Well, let's take a look at how Buffett sees "Retained Income" and the distinct advantage of having it GROW on a regular basis ....... So if a company is regularly Losing Money it's an obvious outcome that its Retained Income is Declining and its Total Assets, which contains the end result of its Cash Flow statement from within where the FCF is calculated, is being reduced relative to its Total Liabilities. So I'd say that it's no wonder that GME's chart looks like this ...... There surely must be better places to invest ones money than going "down rabbit holes".

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