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

To: j g cordes who wrote (15239)	8/17/2002 2:06:20 PM
From: TimbaBear	Read Replies (1) \| Respond to of 78717

j g cordes: Timba, enjoyed your Intel analysis.. although I was surprized to find terms like "smell" and sainthood in the summary. For me, there is a part of any analysis that is an "impression" of the overall presentation by the company under scrutiny. This "impression" doesn't always lend itself to accurate description by objective terminology. Or, if it does, the length of time it would take to convey that accuracy may be not worth the effort when a simple word like "smell" can convey the idea with a richness I could not match with any number of words. "Sainthood" is another such word, evocative of an idealized pristine image of goodness and rightness. I deliberated whether to include any subjectivity in the analysis and decided that it was appropriate in limited doses. As far as price evaluation? I'm sorry, I must have conveyed that less clearly than I wished. Per the financial results of the fiscal year 2001, at a price of $4.37/share or under it would just marginally represent a level of investor return of about 2 times the going risk-free rate of return which is the minimum multiple I find offers sufficient enticement for me to move capital from safer employment, anything over this price means that this investor is not adequately being compensated for the level of risk being assumed. This seems to be as much a commentary on speculators and insiders taking profits? If that's so I'd suggest you construct two columns of numbers to support that thesis.. the first column current valuations and the second identical column with stock option payouts plowed back into the company (or never taken out, or lets just say left as cash at CD rates).. what would be the stock price be? To make the stock options argument this would be a better course of reasoning. The analysis is an attempt to discern the true level of cash flowing through operations activity. I really don't concern myself with speculator activity in the framework of these analyses.(Perhaps you were referring to my commentary on the feedback I got from posters to other sites that caused me to conclude that speculation was still running too rampant for this to have been a market bottom?) However, insiders taking more than 20% of the profits and hiding that fact through cleverly applied accounting, does appear to have a major impact on the cash that is remaining after the depredations and that impact has been revealed to me more clearly as a result of the SCF analysis. I believe I have shown via the company's own statements on the 10K, numbers it has given in footnotes, and an analysis of the Statement of Cash Flows, a close approximation of the true profitability of the company and a close approximation of the cost of exercised stock options. If someone wanted to extropolate that information into other ways of looking at the numbers, I'd be interested to see the results. Timba