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

To: Demetre Deliyanakis who wrote (16517)	3/1/2003 10:36:40 PM
From: James Clarke	Read Replies (1) \| Respond to of 78486

<<Also, some cities and states have sold tobacco bonds to raise cash. The bonds are secured by tobacco payments. It is impossible to sell the bonds, if tobacco use continues to decline.>> Check the tense of the verb. They already sold them. Thats the bondholders' problem, not the states - they took their money up front. I used to trade Philip Morris until the government did their thing in 1999 - since then I'm just a watcher. Great great company, but they've got a big problem.

To: Demetre Deliyanakis who wrote (16517)	3/1/2003 11:00:32 PM
From: 249443	Read Replies (1) \| Respond to of 78486

Demetre: re MO The lawsuit issue has been around for longer than a decade. :) The dividend is good and MO has a dominant market position. Any negative verdict will be fought in the courts for years. One either accepts the litigation risk and buys the common or chooses to a) buy other securities, or b) buy MO common, or c) choose to buy MO with some downside protection (hedging, puts, long/short other tobacco stocks). I choose option C. I really prefer to buy quality companies, w/o the litigation risk, that can increase their dividend and in the long run (5-10 years) will have a higher yield on cost basis than MO at current prices.

To: Demetre Deliyanakis who wrote (16517)	3/2/2003 7:34:40 AM
From: Larry S.	Read Replies (1) \| Respond to of 78486

With the sharp acceleration in cigarette taxes, both federal and mainly state, MO has lost much of its pricing power. that is the real risk in the stock now, not the litigation. Mo would have to cut marlboro prices almost to equal the cost of brandX, but the taxes will still keep smokes very high in price. its a quandry. div is nice, I wasn't aware of SAB as a MO holding. How big a stake do they have in SAB, and how much of KFT do they still own. I like UST in the tobacco sector, similiar divie, premier smokeless company, big penalty out of the way now, good takeover candidate. larry