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

To: Dale Baker who wrote (14674)	6/23/2002 8:06:18 AM
From: Dave	Read Replies (1) \| Respond to of 78751

Dale, First, I never stated that ALD is "better" than MCGC. Instead, I stated that I, too, was eyeing MCGC; however, I chose not to invest. I don't understand the mentality of averaging down in broken stocks mired in controversy and asserting that is a safer value strategy than buying stocks with a steady up channel over time. To each their own, but I should caution you. In this type of market, one day a company is better than "sliced bread". The next day, its mentioned in the same sentence as Enron. My reasoning is simple on this one. I am reading that many VCs are hurting right now b/c many of their portfolio companies may go bankrupt. Therefore, if this is true, how can MCGC stay profitable when many VCs are worried? MCGC is not a value stock as defined by Graham and Dodds. Instead, I view it as a risky company. Let me ask you this question in a different way. If I theoretically put my money in the bank, I will receive 1-2%? Utility stocks are yielding approximately 3-5%. If MCGC is yielding 10%, one is taking on risk and alot of it with respect to what the market is willing to pay with respect to Dividend yields.

To: Dale Baker who wrote (14674)	6/23/2002 12:07:12 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78751

regarding: "Why would ALD be a better bet than MCGC given the track record since March?" The time period you pick is an important factor. MCGC hasn't been a public company long enough for it to qualify as a Ben Graham value stock. ALD, on the other hand, has a strong record going back decades. Regardless of the controversy surrounding it, ALD does qualify as an investment operation, imo, because I believe it meets the criteria of "promising safety of principle and an adequate return, after thorough analysis". That thorough analysis can be seen and studied on the very good Yahoo thread. OTOH, it is true that there are astute people who have concluded from their thorough analyses that that the safety and dividend are not assured, so for them, the stock is neither a Graham value nor a buy. Imo, an important reason for considering MCGC as a value play (but not a Graham value) is the implied long-term success of the management team in doing these deals in business sectors they've specialized in. One hopes and assumes they can be as successful on their own in their public company MCGC as they imply that they were when they worked within large companies and could draw on the support and resources of those firms. Paul Senior