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

To: Q. who wrote (12306)	4/13/2001 1:47:04 AM
From: James Clarke	Read Replies (2) \| Respond to of 78520

"2X net-net", "3X net-net". Careful there. I know net-net investing and have never and probably would never invest based on any function of that ratio unless the stock trades below it. We might be doing a little too much net-net analysis on this thread - that is one arrow in the quiver, and one I use rarely. Its only appropriate in my view for a tiny sliver of stocks I look at, and for those it is very important. I don't think Ben Graham ever intended for net-net to be the denominator of a multiple, like P/E or P/B. And that multiple has no meaning to me either. For the vast majority of stocks I buy, net-net is not something I would even consider relevant. 2/3 of net-net valuation has some intuitive meaning in terms of liquidation value. What does 2X net-net mean? You need to think about that before taking a wonderful investment model way beyond its "circle of competence". This would be an interesting discussion. I'd like to participate in that, just in case there's something I'm missing here. jjc