Jeff, you raise a very good argument. I tend to agree with Michael's rebuttal, but I hear you. As Michael has pointed out, we are not literally following Ben Graham's doctrine - actually we're not even close. It is impossible in this market. So it is extremely valuable to really think this through. Thanks for your input.
As for those of you thinking of buying PSO, Jeff is right. Being patient and waiting for a price toward the lower end of its historical range is a perfectly reasonable strategy. (As is not buying it at all if you are uncomfortable with the investment). Your only risk in doing that is if it runs away from you, but you don't lose money if that happens. So maybe we say, buy it under 6? That was where it was when I first found it two weeks ago, but then I ended up having to pay 6 1/8. Even I did not buy all that I want. I will finish my position if I see a 5 in front of the price again.
We have beaten this particular investment opportunity to death. What would be much more enlightening now is if somebody else would take up the challenge of evaluating another true net-net in detail, and would subject themselves to some questions. I would love to find two or three more of these on which I can have a similar level of conviction. I don't think they exist, but I would love to be proven wrong.
Thanks everybody for a great discussion. I'm going to stay up late looking at another net-net I just heard about. 90% chance it will be a dry hole, but you never know.
Respectfully,
Jim |
