To: gdichaz who wrote (3374 ) 8/23/1999 12:42:00 AM From: michael r potter Read Replies (1) | Respond to
Just a few minor comments. I agree that it is useful for SFE to be involved in former rights offerings when they stumble, initiating management changes and "vision" expertise if needed. That involvement can be met without buying a lot more shares. Especially so, if there is limited capital, and some of the capital generated is from selling stocks like Tellabs. This is from memory, but I believe SFE started selling Tellabs in the $24 area one year ago [adjusted for split], soon after the Coherent takeover was was completed. Tellabs is now in the $60s. They bought a lot of stock in the troubled companies in the $3-$4 1/2 area. Most of the stock purchased in that price range is still $3 to $4 1/2. Now this is not just a matter of hindsight, as I was grumbling back then about selling Tellabs, as it had winner written all over it. Their buying of the distressed companies may have temporarily supported the price, but there is no evidence the buying had any lasting impact on the price. Some investors are just bottom pickers, buying perceived value. Other approaches involve picking winners, paying more for them, and hopefully riding them higher. In general, in this decade, the latter approach has been more successful. If one looks at William O'neils work from Investors Daily, the latter approach has worked better for an extended period of time.[more than just this decade]. I don't want to be that hard on SFE management, because the game is not over, and maybe they will yet turn out to have done the correct thing... But as of today, those $4 purchases of Docc, CMPC, and OAOT, would have to be worth $11 to equal Tellabs appreciation. They have a lot of catching up to do, and Tellabs isn't sitting still. True, they can not influence Tellabs management, but with the job Tellabs management has been doing year after year, who would want to? Have a productive week. Mike
