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Strategies & Market Trends : Disciplined Investing, especially the NAIC way -- Ignore unavailable to you. Want to Upgrade?

To: - with a K who wrote (321)	5/8/2002 6:34:34 PM
From: The Philosopher	Respond to of 469

Wish you had told me you would be in the Seattle area -- we might have gotten together. I didn't go to the annual meeting, but might next year since I'll be retired by then and have some time on my hands. And if I get a client or two, I can write it off as a business expense!

To: - with a K who wrote (321)	5/9/2002 2:12:39 PM
From: The Philosopher	Read Replies (1) \| Respond to of 469

We discussed Merck this morning. We already hold it, so it was a quarterly update. It's trading near its low. There is good reason to think that the market has oversold it in favor of Pfizer. Yes, Pfizer has a stronger pipeline, and the Merck-Medco situation isn't clear, though often when a company spins off a division the combined stock price of the two units together exceeds the price of the original stock. But even assuming a zero earnings growth over the next five years, which isn't likely, and outlying the top PE and dropping that average down to, as I recall, 25, and using the low from three years ago, 52 as I recall (my SSG isn't in front of me right now), it was still in the buy range on a 25-50-25 zoning It's hard to see how it would do worse than that scenario. They still have drugs in the pipeline and a strong research effort to sustain their pipeline down the road. So you believe the SSG concept, it's hard not to buy it at around this price, though I think it will go sideways for awhile, giving some time to examine it more carefully. We decided not to buy because it's already 10% of our portfolio. But I'm going to look very seriously this weekend at picking some up for some other accounts. Do you have any thoughts or other information on it?