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Strategies & Market Trends : Buffettology

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To: Jurgis Bekepuris who wrote (248)	8/15/1998 11:03:00 PM
From: James Clarke	Read Replies (1) of 4691

With the market down 10%, but the average stock down much more, it seems time to revist some Buffett stocks to see whether they might be at buy prices. They are down. Disney and Gillette are well off their highs. Even Coke is down 15% from its high. But I considered these so overvalued at their peaks that even 20% off those highs doesn't begin to offer a margin of safety in my opinion. What I have found is some unrecognized Buffett type stocks that have gotten creamed. One is not a stock Buffett would be likely to buy, but rather a Berkshire clone trading at 15 times earnings. A $5 billion+ market cap company. I think it is undervalued by 40% and would make an excellent long term buy now. I don't mean to tease, but I have recommended this to my firm and have to wait for a decision, then for us to buy it. I look forward to posting an analysis of this puppy, but only when it is ethical. My point is not this one stock - I have a smaller cap Buffett stock falling to my price now too - my point is that frustrated Buffett investors who have just given up should revisit what they have looked at in the past to see whether they make sense now. A month ago I had given up finding anything interesting at a reasonable valuation, let alone a buy price. Selling has been very irrational in many lower profile stocks and some high profile stocks as well. Jim

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