I agree with everything you say about INCO, but I still wouldn't buy it. What we are looking at is a very very (VERY) cheap stock without a catalyst. If you know something about nickel prices and trends that I don't, by all means, buy the stock. But when I see a stock that trades at a lower price than it did 30 years ago, I have to think there is something more going on here than commodity prices. Like I said before, if you want to play commodities, take a look at Phelps Dodge, which is a very well managed company. I guarantee you, if Nickel goes up, so will Phelps Dodge. And PD pays a generous dividend (which is not as rock solid as people think, but even if cut will still be above Nickel's miserly .9% yield). But at the same time, my Graham angel is whispering to me that Nickel at 9 could double and still be cheap. Your instinct is absolutely right that you are looking at perhaps the most unpopular stock on the US market. VALUE investors are the ones selling now, and these are the Graham value investors. The value investors who get scared sold it at 15. Trust me, I know - my firm took this from 23 to 16 and then bailed. Looked really stupid at the time, but brilliant now. I'm almost talking myself into buying it now. Probably worth a lot of research. Do I lose credibility as a value investor by virtually talking myself into something?
Jim |
