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

To: Brendan W who wrote (13020)	9/4/2001 2:12:31 PM
From: Bob Rudd	Respond to of 78730

<<not cyclical>>I've come to beleive that virtually all businesses have some cyclicality and/or lifecycle exposure [cyclicality is often the lifecycle of a product category or generation], though not necessarily in the traditional sense as direct exposure to the economic cycle and not in the sense of the chartists that beleive there are regular repeatable cycles that can be located and and forecasted. The cyclicality I'm referring to more business/industry specific, is irregular and could be tied to a number of variable including fashion/fads [Hasbro's earnings surged on Pokemon and sagged on the fade], store concept buildouts [No more good places to go, HD]. The reason many of these 'non-cyclical' companies have seen growth flatten is that their good returns attracted competitors as their main product reached near saturation. This is a common theme in the cyclicality of many industries: attractive opportunities bring competitors and excess capital spending that competes away the profit by oversaturating the market. This article captures some of what I'm writing about: thestreet.com

To: Brendan W who wrote (13020)	9/4/2001 2:38:38 PM
From: Bob Rudd	Respond to of 78730

OI: Hard to say where the asbestos thing lands...as companies have gone bankrupt, fewer deep pockets are left in the pool and it has been a mistake to underestimate the creativity of plaintiff's attorneys in getting at them. Buffett probably thought that USG's asbestos problems had been discounted in the mid-teens: It's now BK and in the 5's. That said, I may join you in this one but as a tax loss play, later in the year if selling takes it lower. And this would be a trade of 1 or 2 months, not a long term position. Several of these asbestos companies bottomed in mid-November to late Dec time frame last year and rallied explosively into Jan and early Feb/Mar but sagged from there: quote.yahoo.com