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

To: Paul Senior who wrote (14737)	7/3/2002 12:12:52 PM
From: Grommit	Respond to of 78673

FLM - I changed my mind. This earning guidance cut doesn't sound bad, but the comments sound enronian. That could sink the stock more than anything. I also checked yahoo messages and a few employees have some very negative things to say. I decided to take my money out of this one until the accounting dust settles. 9:23AM Fleming downgraded at JP Morgan (FLM) 18.11 previous close: JP Morgan downgrades to MKT PERFORM from Long-Term Buy due to earnings concerns regarding acquisition integration, earnings quality, the ability to attain earnings targets without taking one-time charges, and questions as to whether growth expectations are realistic without more acquisitions; cuts 2002 est to $2.00 from $2.20, below mgmt guidance of $2.20-$2.30. ... Sold a small amount of NWPX. Bought GL. My new motto is the rolling stones song title -- "gimme shelter".

To: Paul Senior who wrote (14737)	7/3/2002 12:36:50 PM
From: Don Earl	Read Replies (2) \| Respond to of 78673

<<< I've got a small position also in SWY, and it's hitting new lows today. Under 10x est. earnings.>>> Safeway is one I had an order in on some put options a few weeks ago which didn't fill at the price I wanted. It looks like I should have gone in at market. They play a lot of games with pro forma accounting to get the PE up to 10, and the GAAP doesn't look all that hot either. For example; a year ago they reported something like .76 for their December quarter, but actually had the nerve to pro forma in earnings they thought they should have had if there hadn't been a strike, which affected their numbers by close to .20. On a nation wide basis, they open, close and remodel stores on almost a daily basis. For all practical purposes, it's a current business expense. It goes on the books as depreciation at nowhere near the rate the costs are incurred. In this market debt to equity is the acid test for value. The pat answer that, "We are borrowing all that money to invest in the future of our company.", should be a red flag to anyone who got caught on ENE, KM, or WCOM. If these companies had ever been as profitable as they led everyone to believe, they would have had a ton of cash on the balance sheet instead of debt. Accounting abuse is endemic in US markets. The majority of companies in the S&P 500 are in the index through the manipulation of GAAP. There's a massive head and shoulders formed in the Dow 30 and the NASDAQ 100 just busted through September support levels. I wouldn't be surprised to see the Dow below 6000 before another year passes. I ran across this article and thought the thread might find it interesting as some of the names mentioned are some I've seen discussed on the board. biz.yahoo.com When the top fund managers can't hit enough winners to show a profit, it's not the picks, it's the market. Right now it's almost as easy to make money on short play as it was to make money on dot.coms in 97. Just close your eyes and pick something, it's almost a sure bet it will go down. IMO, the "obscene value plays" are no longer long positions. At least if a person's goal is to make money.