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

To: Madharry who wrote (15653)	10/17/2002 12:28:30 AM
From: Paul Senior	Read Replies (3) \| Respond to of 78515

Yes, UHAL never worked out for me. I believed in its potential, and I posted a least a few times that I owned it. I held my shares for several years until recently. Last week or so, I eliminated the dredges of my position. There are a couple of lessons for me. One is that potential is okay, but eventually results have to be forthcoming. A limit on patience is required. I'll generalize here although it's always difficult to generalize from one specific case - I've seen stocks do nothing for years as the companies behind them went about their business until one day -- a big stock move. U-haul ranks among the very, very top companies in brand recognition. They have or had many opportunities to build on that with their self-storage facilities, insurance tie-ins, and with other companies interested in finding U-Haul's customers. In the last few years not much ever dropped to the bottom line from any of their activities, including core truck rental. So perhaps I should have set a time limit to how long I was willing to tie funds up in this stock while waiting. But THE lesson I take away is this: When insiders are perceived to be self-dealing, be VERY and EXCEPTIONALLY wary of investing in their company. The deck is stacked against you. Perhaps I am misstating the situation. Management either by bad luck or incompetence has made some business decisions that have quickly, this year, drained their wonderful franchise of its value. Maybe permanently (as the bad news and market decline seem to suggest) or maybe only temporarily. OTOH, as I understand the business activities of the controlling family, there are many separate dealings with the company. It's something like this (I may have some facts wrong here): one family member has the large contract with Amerco (UHAL) for vehicle maintenance. One family member routinely buys real estate from UHAL or sells real estate to UHAL. Or is the real-estate consultant to UHAL. One family member has a printing business which counts UHAL as a big customer. And of course, family members are employed in the top management positions of UHAL. So if all this is true (which it might not be) and I knew it, I have no excuse. The lesson is that no matter how good the business, when you bet on owners who certainly don't seem to have the same interests as you do, they can destroy shareholder value and your investment no matter how good the potential is for the business. And of course - sigh - this was pointed out to me people here when I posted here about UHAL. jmo Paul Senior