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

To: Wallace Rivers who wrote (11240)	10/7/2000 10:46:13 PM
From: jeffbas	Respond to of 78625

On USG, I briefly owned a sizeable company Eagle Picher many years ago, which eventually went under because of asbestos liability. Two key issues are how fast is their liability changing over time, presumably available from SEC filings, and is it funded on their balance sheet. You have to make a guess as to where the liability will eventually end up and how much extra cash will be needed. If you can do this and they are still OK, then it is worth looking at. If you are unable to make this analysis, then I would respectfully say that you are not considering the most important investment factor, and are gambling.

To: Wallace Rivers who wrote (11240)	10/10/2000 12:33:16 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78625

Wallace: USG, I picked up some during this downdraft after having sold a prior position at a profit a while back. Marty has/had 500k+ shares @~30 based on last report of his fund. Said it was the first asbestos exposed position he's had, but that he thought the asbestos exposure was over discounted. The asbestos risk is a wild card that is very difficult to quantify given legal system, but average settlements are way lower than OWC owing to nature of product - joint compound, primarily. Jeff Bash's point about difficulty of nailing asbestos risk down is well taken and I do consider this a gamble. Read the 10k for a pretty good coverage of it. Lehman put out a report on Armstrong that gives excellent coverage of asbestos issue if you have access to their stuff. Beyond the asbestos, you have declining drywall prices due to capacity that has come on line to offset shortages in 1999. Estimates are begining to converge on low - mid 3's for 2002 after having been in the 5-6 region.