Deswell Industries (DSWL) Message Board

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Technology Stocks : Deswell Industries (DSWL)

DSWL 3.410

+3.6%

Nov 5 3:58 PM EST

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To: jmt who wrote (1198)	2/13/1999 12:05:00 PM
From: Michael Burry	Read Replies (1) of 1418

Now annualize the earnings and the company is trading at or above the multiple afforded to its mainland peer group. Firstly, we invested for different reasons. I invested in Deswell becasuse I would like to own a business with this sort of cash-generating power outright at recent prices. I assumed no growth, with a large margin of safety for a decrease in earnings. Secondly, this is a growth cyclical. To freak out over a decrease in earnings during the low part of the cycle (now 1.5 years into the Asian crisis) is irrational. But hey, that's how I make my money. So I encourage more investors to overreact to lower earnings in cyclicals. You want to look at the average earnings power and growth over the long-term, not annualize the current earnings trough. Mike

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