<<1. book value.
some stock considered have "value" if below book value, but watch out,
as these book value could be some unsold inventory and it could worth 0.
DUH. THATS WHY YOU READ 10-K's AND DO SOME THINKING. THERE ARE A LOT OF STOCKS TRADING BELOW BOOK VALUE THAT I WON'T TOUCH. THOUGH I'LL TELL YOU, MY FAVORITE SCREEN IS LOW P/BOOK. AND I DON'T MEAN P/B BELOW THE MARKET MULTIPLE OF 5 TIMES BOOK. AND I DON'T MEAN BELOW BOOK. I MEAN THINGS TRADING AT HALF OF BOOK. AND OF COURSE YOU EVALUATE THAT BOOK VALUE. CYM's BOOK VALUE ISN't PERFECT, AND ITS ASSET VALUE ISN'T SOMETHING YOU CAN CALCULATE WITH ANY CERTAINTY, BUT THAT'S WHAT A MARGIN OF SAFETY IS ALL ABOUT.
2. another thing you mentioned that if one stock has zero down side
risk, you will buy it without thinking about the upside potential. well,
in this case, you are more like buy CD or bond, or things of that
nature, then why bother with stock. i think very few stocks has zero(or
very little) down side risk. the nature of stock is the volatility.
THAT'S NOT WHAT I SAID AT ALL. IN YOUR TERMINOLOGY WHAT I AM LOOKING FOR IS A STOCK WHERE ALL THE "VOLATILITY" IS ON THE UPSIDE. THE EFFICIENT MARKET THEORY WOULD TELL YOU NO SUCH THING EXISTS. IN MY EXPERIENCE, IT DOES, AND I CAN FIND ONE EVERY SIX MONTHS OR SO. CYPRUS AMAX, AND THE OTHER STOCKS I HAVE RECOMMENDED, ARE NOT BONDS. ON THE DOWNSIDE THEY MIGHT BE, ESPECIALLY WHEN YOU'VE GOT AN 8% YIELD LIKE CYM. BUT I THINK I SAID SOMETHING ABOUT BEING PRETTY CERTAIN OF A 30% GAIN BY MARCH. THAT AIN'T NO BOND.
JJC |
