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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (5462)12/18/1998 7:28:00 PM
From: Freedom Fighter  Read Replies (3) of 78702
 
CYM Valuation

I tend to agree with everyone about the cheap valuation on CYM. To that list you might add AR, FCX, and BHP. I have considered buying all of them. The only reason I haven't is that commodity businesses are generally bad businesses. They have very low normalized ROE and almost nothing in the way of growth. It would seem that the ultimate return is going to be completely related to the turn in commodity prices and the subsequent revaluation of them by the market. That could possibly take years. I really have no idea. I own ESV. I suspect it is in a very similar situation. My gut tells me that even though these investments COULD work out well, they may not if the turn takes a long time. I generally prefer better businesses.

Wayne Crimi - Value Investor Workshop
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