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

To: Shane M who wrote (2960)	1/27/2002 1:59:11 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 4690

Shane, I own ANF. Bought it at lower prices (~20). Tough to value with their short history of huge ROE that is clearly unsustainable. I'm currently using 23% expected ROE - based on 9 months ROE last year, that gives expected annualized return of ~13% from here using Buffettology spreadsheet. The calculation is highly dependent on actual ROE and possibly not applicable, since ANF is not a true "high moat" Buffett company, so take it for what it's worth. I am not interested in APOL, since I am very doubtful of service companies, especially about an education company. JKHY is also a pass - one has to understand their competitive position which would be tough, since I have not heard about them before. BBBY - I doubt, but I'll take a look. CTSH - similar to JKHY, I don't want to own consulting company where I don't know competitive strengths. Others pass 1 minute test of looking at their Yahoo profiles. I'll take a look at the other companies later when I am on my main stock analysis PC and let you know. Let me know what you dig out. Jurgis - back on the murder trail...

To: Shane M who wrote (2960)	1/28/2002 5:24:32 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 4690

Shane, I ran through the ROE histories and "Buffettology" spreadsheet calculations for your companies. I discarded APOL, JHKY and CTSH as mentioned before. I discarded ADRX, MTD for too short histories. From the remaining CHKP, WAT and AEOS are the most attractive with ~17-19% projected annual return. However, all of them have warts: CHKP - unsustainable average ROE of 33%, if it drops to 25%, the projected return drops to 10%. Foreign company. WAT - short history, spiky ROE, possibly unsustainable average ROE of 29%, if it drops to 25%, the projected return drops to 13%. AEOS - trendy retailer, possibly unsustainable average ROE of 24%, if it drops to 20%, the projected return drops to 11%. A notch below is CDWC. BBBY is not interesting at all. I have NOT yet considered the very important issue of the moat and/or brand. I have not looked into recent filings - except for CHKP - and recent news. I have not looked into different share classes - did you do that with APOL? I may look at these things for CHKP, AEOS and WAT. Any comments are welcome. Jurgis