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

To: Gush who wrote (20222)	12/9/2004 8:40:40 PM
From: Wallace Rivers	Respond to of 78565

This is probably too boring for any board on SI, but it does address the value component. I recently purchased FRB at 18.50, over a 5% discount to NAV, yielding 5.6%. The discount to NAV is the largest in its class (loan participation): etfconnect.com I like the fact that these types of funds should perform OK in a rising interest rate environment. FRB is a new issue closed end fund (at 20 this year). As so often happens in fixed income new issues, the stock holds up for a while, then breaks syndicate bid. It almost has to, as it immediately starts trading at a 5% or so discount to NAV, what with the underwriters commissions, etc. For the fixed income component, I think it's a pretty good place to be at this time. Relatively conservative, nothing too exciting here.

To: Gush who wrote (20222)	12/9/2004 8:55:31 PM
From: Steve168	Respond to of 78565

I had the same thoughts through me. Many people are talking about "Durable Competitive Advantage" on this value thread. Although I believe DCA is a very good thing, I think determining a company's DCA is very hard, if not impossible. Especially in tech industry, new inventions and things just come to replace existing business every couple years. Predicting DCA is not too far from predicting future earnings, which is far from Ben Graham's value investing style. The Ben Graham "below net current asset value" strategy and ideas should probably be the main focus of this thread. In the 1973 edition of The Intelligent Investor, Benjamin Graham commented on the technique: ”It always seemed, and still seems, ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the applicable net current assets alone -- after deducting all prior claims, and counting as zero the fixed and other assets -- the results should be quite satisfactory.” In an article in the November-December 1986 issue of Financial Analysts Journal, "Ben Graham's Net Current Asset Values: A Performance Update", Henry Oppenheimer, an Associate Professor of Finance at the State University of New York at Binghamton, examined the investment results of stocks selling at or below 66% of net current asset value during the 13-year period from December 31, 1970 through December 31, 1983. The study assumed that all stocks meeting the investment criterion were purchased on December 31 of each year, held for one year, and replaced on December 31 of the subsequent year by stocks meeting the same criterion on that date. To create the annual net current asset portfolios, Oppenheimer screened the entire Standard & Poor's Security Owners Guide. The entire 13-year study sample size was 645 net current asset selections from the New York Stock Exchange, the American Stock Exchange and the overthe- counter securities market. The minimum December 31 sample was 18 companies and the maximum December 31 sample was 89 companies. The mean return from net current asset stocks for the 13-year period was 29.4% per year versus 11.5% per year for the NYSE-AMEX Index. One million dollars invested in the net current asset portfolio on December 31, 1970 would have increased to $25,497,300 by December 31, 1983. By comparison, $1,000,000 invested in the NYSE-AMEX Index would have increased to $3,729,600 on December 31, 1983. The net current asset portfolio's exceptional performance over the entire 13 years was not consistent over smaller subsets of time within the 13-year period. For the three-year period, December 31, 1970 through December 31, 1973, which represents 23% of the 13-year study period, the mean annual return from the net current asset portfolio was .6% per year as compared to 4.6% per year for the NYSEAMEX Index. The study also examined the investment results from the net current asset companies which operated at a loss (about one-third of the entire sample of firms) as compared to the investment results of the net current asset companies which operated profitably. The firms operating at a loss had slightly higher investment returns than the firms with positive earnings: 31.3% per year for the unprofitable companies versus 28.9% per year for the profitable companies.

To: Gush who wrote (20222)	12/10/2004 6:49:55 AM
From: John Carragher	Read Replies (2) \| Respond to of 78565

talking about siri as i thought it was a great value at less than a $2. later it look terrific at $5. bought in and sold at $9. Analyst who down graded at $9.+ said it was on value! it dropped back to $6. i bought back in and think of it as a value play not mo mo... this is a new industry like cable was a decade ago. If you buy some and put it away you will get your reward. If it runs because of mo mo i will take profits vs during the bubble times long term hold and have profits taken away.. please put me on ignore. thanks ps I will $7500 for a few days anytime.. it felt terrific.