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Strategies & Market Trends : Value Investing

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To: Wallace Rivers who wrote (3233)	2/14/1998 9:59:00 PM
From: James Clarke	1 Recommendation Read Replies (1) of 78603

On AOL, watch cash not earnings. You don't see it yet, and I wouldn't expect to because the company is growing so fast. But when this company's growth slows it is going to pour out cash faster than you can imagine. Remember the flack about AOL capitalizing marketing costs to boost earnings? I had no problem with that. Its the same reason Merck always confounds value investors by always trading at "ridiculous" earnings and book multiples - capitalize R&D and it has always looked like a bargain. Once again, I wouldn't buy the stock at this price, but AOL is no short because being wrong will cost you a fortune.

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