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To: Mike Buckley who wrote (37379)	1/2/2001 2:00:56 PM
From: johndelvecchio	Read Replies (2) \| Respond to of 54805

I thought the Mauboussin interview provided interesting topics with almost no substance. My main gripe is that he doesn't show an investor how to reverse engineer the process to determine what is implied by the current stock price (beyond the scope of the interview, but fair game in his reports) For example, his capatcolumbia reports are really interesting but cannot be directly applied to stocks because he doesn't work through the process. I think that understanding what expectations are built into prices is far more valuable than the P/E or P/Sales, but if you're going to talk about it but not show people how to do it, then you are just another talking head. Hopefully his new book will shed enough light on this. BTW, when he is talking about expectations and the time frame of competitive advantage, he is talking about CAP. The interesting thing is that while he has been very bullish on AMZN, Rappaport (the co-author of the new book) wrote an article in the Wall Street Journal last Feb. making the case for an AMZN short. At that time, the stock was like $60 a share. I know that if I could really get my arms around this stuff - beyond the theory - I would eliminate a lot of mistakes. John

To: Mike Buckley who wrote (37379)	1/2/2001 8:52:03 PM
From: muckraker71	Respond to of 54805

That's true, but stock values are basically an estimation of future earnings. I know there are people out there that want to repeal the basic laws of finance, but it cannot be done. In theory, today's stock price is the net present value (NPV) of future cash flows. In practice, this may not be always adhered to by greedy or fearful investors, but estimation of future cash flow is the single best tool an investor has when estimating fair value for a stock. Trying to run an end-around on the laws of finance may cause serious damage to your net worth.