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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (7518)	6/9/1999 11:38:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 78666

I don't see 17% either, but you switched to "return on capital" That's because there's other owners who have a claim on the company - its bondholders. It's folly to use simple ROE to compare companies with different capital structures (i.e. different debt/equity ratios). IMO, if you are going to be determined to use ROE of 16% despite the debt, no one's going to stop you. Certainly not the people that want to sell you their shares. Mike

To: Paul Senior who wrote (7518)	6/10/1999 12:44:00 AM
From: James Clarke	Read Replies (1) \| Respond to of 78666

OK, 16%. I didn't have the numbers in front of me when I was writing last night, but 16 or 17 - who cares - I think the average is 16.7 or something like that? The P/E is 11. Champion is very attractive too - I agree with Mike there (imagine that - Mike and I agreeing with each other) And if that ROE is less than the industry average, which I do not agree it is, doesn't that tell you something? Well, you know it, you own Champion. And as for Clayton's debt level, your post implied that ROE is coming from leverage. The capital structure of this company is extremely conservative in my opinion. That's one of the reasons I own it. Also, the USEC announcement today was huge. I consider it positive in a big way. The market may consider it negative. Watch this stock tomorrow. It will probably trade in a 2 point range one way or the other. I would pay $15 for it now if I had to. I don't think I will have to. JJC