Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Senior who wrote (14504)	5/20/2002 2:13:21 AM
From: Don Earl	Read Replies (1) \| Respond to of 78548

Re: Glassman article I just have to comment on that one. <<<Remember that prices are set not at random, but by the actual buying and selling of thousands of investors, who rely on all the public information they can glean.>>> Did this fellow just fall off the turnip truck? The only certainty in the stock market is randomness controlled by total anarchy. Most private investors wouldn't recognize a 10Q if one came up and bit them on the leg. And while the majority of stock analysts would probably recognize a 10Q, maybe 1 out of 4 might actually be able to understand the information they contain. <<<An excellent place to start is the Value Line Investment Survey, which each week lists stocks with the "widest discounts from book value.">>> Seitel (SEI) was discussed here briefly a few months ago. Oddly enough Value Line had recently issued a glowing report on the company and gave it their top ranking. The stock has lost over 75% of its value since that report was issued. A quick look at PHSY mentioned in the write up suggests a company at least as bogus as Seitel. From the article: <<<And this is a company that in 1999 earned $6.27 and continues to have a powerful cash flow.>>> The only problem is that the "powerful cash flow" appears to come exclusively from issuing new debt on a regular basis. If earnings are so great, what keeps happening to all the money? I know. They "reinvest it in the future growth of the company". Poor Glassman is going to be horribly upset when he finds out the truth about cash flow, Santa and the Tooth Fairy. NPK might represent some kind of value, but it's hard saying what kind. 7 years ago the stock was trading around $30. Today the stock is trading around $30. The dividend yield is approximately what one would expect from a FDIC insured money market account. What's the point of accepting stock market exposure for money market returns? NPK might play well as a slow moving rolling stock, but I don't see a lot of upside potential in a company that is only able to show $6 million in profits on $1.2 billion in sales. Not to mention that buying near, or at, the top of the chart can hardly be considered "bottom fishing". Glassman looks to be the classic example of the old saw, that, "He who attempts to appear wise among fools is himself considered foolish among those who are wise.". In his case a person would only have to be wise enough to recognize cow manure when they step in it.