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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (64233)	7/9/1999 6:12:00 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Mike, Regarding government stats: I started out as a strictly bottom-up Ben Graham/Warren Buffett sort of value investor. Over the last 4 years I've given myself what I consider to be a crash course in economics hoping that some top/down stuff might be applicable. Mostly I thought it might help me understand the "whys" of what's going on even if it had little to do with the values over the longer haul. The more I learn the more I understand why so many of the best "value" guys simply ignore economics totally. Besides the obvious problems like government and central bank intervention in the free market process, unpredictable human action, unpredictable events, etc... all the numbers are a joke and often very misleading (at least to me). Some are calculated using very subjective ideas that I don't agree with. Some are manipulated for political purposes. Some are incomplete. Some are too complicated to collect with any degree of accuracy. It makes for interesting discussion, but for my own investing I'm just looking at the capital and equity a business has in place (including some special adjustments and things that are not captured by accounting) and what average "real" rate of return I think that company will be able to generate over the long haul on the reinvested earnings. I'm looking at business position, business risk, management skill in the past, prospects, competition, etc... If I can make an educated guess and I think I can get an attractive risk adjusted return I invest. Whether you look top/down or bottom/up you come to the same conclusion. Many stock prices are insane. Most of the rest are very high. I suppose you can always find a bargain or two, but usually it's in a business that you don't want to be in. Wayne