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Strategies & Market Trends : Value Investing

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To: Kent J. Davis who wrote (3726)	4/2/1998 8:44:00 AM
From: Ron Bower	Read Replies (1) of 78526

Kent, IMO - Companies with a history of making money (and I mean cash) will continue to make money. Companies that have a history of losing will continue to lose. It's a matter of good management that will increase shareholder value - this is not the price of the stock, but the value of the company. I don't think the ones you listed fall into that category. I look for the companies the market has dumped for the 'wrong' reasons. e.g. MAX (one of Richard's) had a customer declare bankruptcy. They wrote off the receivable because of it and it resulted in a large loss. The bottom fell out of the price. 1)They will recover most of the write-off, 2) they are generating $2.5M per Q and growing fast. I bought at 6.50 and sold 1/2 at 8.50. (thank you RB) It has fallen back and I placed a buy order this morning. I feel it to be an excellent small position long term hold. IMO - a low P/BV may be an indicator of a good buy, but it may also indicate a company that's actually in trouble. I have a long list of companies selling below BV, no debt, and a lot of cash that I've rejected because they aren't going anywhere. For what it's worth, Ron

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