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

To: MCsweet who wrote (25400)	11/29/2006 8:27:16 PM
From: anializer	Read Replies (1) \| Respond to of 78704

I'm not in any hurry to buy and have non productive funds at work. I just keep in mind that value stocks usually don't look good when they represent value, and when companies are in trouble the foresight to envision how they will become good businesses again is a gift I don't have. In fact the last 12 month earnings were in large part interest on the cash hoard. Take a stock like TWI which I was buying at $2-3. The Company was in trouble and looked like bankruptcy was possible. Not having the fundamental foresight to envision the mining boom and shortage of large wheels that would develop, I never participated in this move. All I knew was that it looked like a value on the books but bankruptcy if they continued the losses at that rate. What saved them was some financial restructuring and the subsequent mining boom. finance.yahoo.com Oh Lord, Give me the wisdom!

To: MCsweet who wrote (25400)	11/29/2006 10:04:13 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78704

Maybe another way to look at SCMR p/sales ratio is to separate the company's value into two parts --- (1)the cash component and (2) the business part that generates the sales. P/sales number, instead of being 3.70/sales per share, becomes (3.70-3.20)/sales per share. That is a lot lower number than 11 and maybe provide a more realistic measure of what p/sales is for the business aspect of SCMR. (Just a rough number because I assume the business does require some cash, so not all of the $3.20/sh cash component can be subtracted out.)