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

To: rjm2 who wrote (17555)	8/12/2003 11:55:27 AM
From: jeffbas	Respond to of 78537

"I just see a possible scenario where the next 20 years the market underperforms to make up for the prior 20." That has been the historical pattern for over 100 years. I suspect the reason for it is that when you wipe out one generation it takes a new one to start the cycle all over again. Although I expect some period of accumulative underperformance - after all we are already way under water since 2000 - I do not think it will last as long. In the old days, investing was much more an individual affair. When you wiped out the individual he was really gone. Now, we have a less risky investor profile, with continuing inflows through 401-K's. I think this change in the "investor" mix will result in a shorter period of underperformance. On the other hand, the economic management of the country's finances borders on incompetent, in my opinion. This offers significant risks of very bad things happening.

To: rjm2 who wrote (17555)	8/12/2003 1:49:05 PM
From: Paul Senior	Respond to of 78537

rjm2: re: "Any good insider buying plays ?" Ah, that word "good" always gives me trouble. Tell you what, I'll put up the link to a stock that might meet your factual requirements ("Under $10, significant insider buying at or below current prices. A book value,NCA and/or low P/E play... I might even look at real estate."). You figure out the right adjective to use (good, bad, or iffy). -g- Message 19010161

To: rjm2 who wrote (17555)	8/16/2003 1:41:33 AM
From: rjm2	Read Replies (4) \| Respond to of 78537

As I have mentioned before, I have been increasingly uncomfortable with the market and my long positions not to mention being unable to find new stocks to buy. Below are articles that support my discomfort and make me wonder if I should be more aggressive in selling instead of just not finding new buys. I would appreciate comments from fellow value investors. Thanks, Bob -------------------------- Sy Hardings Street Smart Report July 30th (sample copy sent to me) INVESTOR SENTIMENT Substantial growth in investor optimisim and complacency is in evidence. For instance, at the market bottomlast october, investors were pulling money OUT of mutual funds at a substaintial clip. But, Lipper reports investors poured $`9.5 BILLION into stock funds in June, the largest inflow since March of last year. (The market topped out on March 19 last year to begin 6 down months in a row) Bullishness amond investors as measured by the AAII,II, the VIX index,etc, have also shown significant growth. All reached extremes of optimisim in recent weeks that have not been seen in a number of years,and in the past were associated with important market tops being near. INSIDER ACTIVITY There has also been an impressive growth surge in the amount of selling by corporate insiders. According to Thompson, insiders are selling $25 for every $1 they are buying. Anytime its above $20, its usually been bearish. This is only the 2nd tyime in the last 10 years the indicator has been over $20 for 3 months in a row. Last time was July,august & september of 2000. (6 months later the S&P 500 was down 25%, the nasdaq 54%) ----------------------------- WSJ Augest 13 LACK OF INSIDER STOCK PURCHASES SENDS A WARNING TO THE MARKET By Tony Cooke --The message that insiders are sending to the market can be summerizerd in one word :Sell. The sustainted drought in insider buying versus selling that began 3 month ago has been matched only once in the past 10 years,according to data from Thomson financial. That occasion- july through september 2000- preceded a 19% drop in the market in the ensuing siz month period and a 28% drop in the following year, said Lon Gerber,director of insider reseatch for Thomson Financial. "It just so happened that was the worst 12-month performance in the decade,"mr Gerber said. Mr Gerbers measure of insider sentiment compares the dollar amount of purchases to the dollar amount of sales. Last month, that ratio stood at $32 of sales for every dollar of purchases,the third consecutive month in which the ratio topped the 20 to 1 measure that Gerber considers a sell signal. Gerber said a dearth of purchases rather than a glut of sales, has driven that ratio higher in recent months. He said he suspects market valuations have gotten ahead of earnings results,making insiders reluctant to add to their holdings. "Executives right now are not willing to buy...untill they see more earnings visibility" gerber said. Michael Painchaud, reseatch director for market profile therorems,tracks insider transactions by their number rather than their dollar value,but reaches conclusions very similar to Mr Gerbers. "We dont think its an accident that the markets have been moving sideways. Insiders tend to be very good predictors of value". Other trackers of insider data are similarly gloomy about the stock markets prospects. David Coleman of Vickers has moved his model portfolios out of the market and Jonathon Moreland of InsiderInsidersm recently took positions in funds that are betting on a drop in technology stocks. Gerber said that in the past 10 years there have been 14 months in which the ratio exceeded 20-to-1. On 11 of those occasions,the stock market was lower 6 months later. Painchaud said that although there have been limited signs of improvement in insider sentiment in the past week,he remains wary. "we wont begin to turn bullish untill the insiders turn bullish" "We're waiting. They'll tell us" ------------------------------------

To: rjm2 who wrote (17555)	8/16/2003 1:26:37 PM
From: rrufff	Respond to of 78537

I might even look at real estate. I think that might be a classic case of buying at the top. Although not quite rivaling 1987, I am seeing what I consider the beginning of classic bubble indicators. When I go to cocktail parties, more people are bragging about the values of their r/e holdings than stock holdings. The stock market, having taken the huge hit over the past few years, is certainly below the bubble mode. As this thread suggests, it's a time for finding values. Values can be low PE or they can even be story stocks with a good chance of a turn around or which are already turning around through new products, mergers and acquisitions. In general, I've found successes in even OTC BB stuff (although I prefer to stick with listed stuff). If you pick the right stock, with solid fundamentals, real sales and prospects for profitablity, with little debt and beaten down in terms of historical pricing, that's the way to go IMO. I also usually hold 30-40 of these so that a total collapse by any one or two is usually just a blip. I've experienced even during the market collapse that major wins can be expected in at least 5-10 of a well picked small cap portfolio. In the worst year, I had probably 5 bankruptcies. However, I also had 5 4 to 10 baggers. The net result in the entire portfolio had a tremendous return despite the general market collapse.