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

To: E_K_S who wrote (24741)	8/28/2006 10:58:10 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78714

E_K_S, about GI: Yes, I bought GI based on low p/book primarily. Well-known that new refineries weren't being built, so maybe the GI assets were actually worth somewhere around book or maybe even more. Also bought based on very low p/e. PSR was very low too, but price/sales always seemed to be low for this and other refiners, so this was not an important metric for me. OTOH, I bought small because: 1. Maybe no NEW refineries were being built, but old ones were continually being upgraded & expanded, and there were better capitalized players with these big old refiners, e.g. Chevron, Exxon. 2, GI had a high d/e ratio. 3. I didn't (and don't) understand GI's geographical locations and benefits/risks thereto. They had two refineries in New Mexico and a pipeline to some New Mexico/Arizona cities. They also owned some retail stations in those areas. Very dinky company, imo. Additionally and scary, there seemed to be persistent rumors that a bigger player wanted into GI's territory, and it could & would do this by building its own pipelines to the areas. An even worse competitive threat rumor was that another refiner might want the crude supply sold to GI, and if such a deal were made, it could leave GI 'dry'.

To: E_K_S who wrote (24741)	8/29/2006 12:17:44 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78714

E_K_S. Looking at my top holdings over several portfolios, the two subsectors that stick out now are refineries and Business Development Companies. As is my tactic, I like to look around and diversify within a sector, if I find one stock I like in the sector. In a cursory look, it seems I started buying the main BDC stocks in 1999, added a couple others a few years later, and when it seemed to me I had enough of those, people on this thread this past year suggested other BDC's to look at. I have bought almost all of them - mostly all in exploratory amounts. GI wasn't the only downtrodden refiner in 2002. I bought several. And subsequently I added to positions in a couple. Missed a few too (aside: I should have held on to your MRO @ $24, Spekulatius!); there were some that I ignored (I can't figure out why now); there were some I didn't know existed. (I only recently have a few shares of DK.) Cumulating other stocks, depending on what one includes or excludes, I guess major and minor oils are a big component of several of my portfolios now. So for example, while I can't say I have a big position in XOM, I can say that if I add my XOM to my OXY, to CHV, to COP, to E to PBR to PTR to etc. etc. etc. that's a big slice of my pie of stocks. Most of these bought and added to since 2004.