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

To: Joan Osland Graffius who wrote (14162)	3/23/2002 10:14:46 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78594

Joan Graffius, re. MRK. Yes, same kind of issues plague MRK, imo. Patents expiring. New drugs not meeting expectations for efficacy, sales. Seems like company remains stubbornly independent (according to media) when they should (according to pundits) pursue joint ventures or buyouts. I last added to my small position 12/12/01 @ $58.74. I may add more. Figuring two year hold will be required. What's your take on the MRK/pharmaceuticals situation? Paul Senior

To: Joan Osland Graffius who wrote (14162)	3/24/2002 12:31:30 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78594

I'm looking at MRK too. I see regulatory, mature development strategy and generic competition headwinds. S&P has it avoid and on 3/15 Arnhold & Bleichroeder downgraded it to SELL from reduce. Analysts are most believable when they turn negative...not infallable, but I pay attention cause they're willing buck the bullish bias. The tough thing for me about evaluating the pahrma's is not having a feel for the 'product' and it's prospects. Even the so-called experts that DO have a feel for how R&D is going to pay off get it spectacularly wrong fairly often. These are some of the reasons I tend towards higher discount rates. Note, too, that this industry can have some rather extended 'flat spots'...on the linked chart, note the 12 years from 73 to 85: finance.yahoo.com All that said, I'm still interested given the low relative & historical multiple.