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

To: Paul Senior who wrote (28562)	10/15/2007 11:42:07 PM
From: Spekulatius	Respond to of 78750

Paul- Doesn't bother me much if people are in or out -- or that I'm in (or out). Just that, if these companies (BZP, KHD, MFCAF) are among somebody's top holdings (and if that person has a decent size portfolio), it is crazy or gambling imo to hold such large positions in these, when the value of these is not clear or not discussed. I agree with your observation and my conclusion is that those stocks are in a bubble for these type of stocks. I have a hard time finding a different explanation for a market segment where the majority of people holding stock have no idea about their intrinsic value.

To: Paul Senior who wrote (28562)	10/15/2007 11:44:07 PM
From: Madharry	Read Replies (2) \| Respond to of 78750

BZP -Ill acknowledge that Im no expert on what the value should be. Im in at much lower prices, and Ive decided to stay in at these levels as there now seems positive news, that they are finding oil and indications are that the the field is large, and this is in addition to the gas that they have clearly found and have deals for. I have also read the recent morgan keegan report, whose new analyst couldnt wait to put an outperform rating on it. I have sold a portion at lower levels and taken some profits though. KHD - I cant tell you whether its ahead of itself or not but it does seem to be in a growth area. MFCAF- I did do an analysis on it when I bought it and reviewed the 12/31/06 financial statement provide lately and am very comfortable with my current holdings, meaning I expect to hold on to this position for awhile and ride its ups and downs at least until it lists somewhere. I admit I am riding Michael Smith's coattails here. But he has put assets into this company at a very reasonable price. Certainly investing in consumer companies with a long track record is safer, but I cant help but feel that the returns are smaller. BTW I posted my 8 best ideas on this thread on 4/26/07 included MFCAF among them and no one at the time or since expressed any interest in it whatso ever. So there was never any discussion about its merits one way or the other. Fact is people who have followed Mr. Smith over the years, including Tweedy Browne, have done very well.

To: Paul Senior who wrote (28562)	10/16/2007 8:48:52 AM
From: maverick61	Respond to of 78750

Paul One of the issues with exploration plays in the oil and gas field IMO is you can't really explain the value proposition on them like you would with traditional value stocks. The value is based on hoped for drilling results to prove up reserves and xxx bopd (which then can be projected to assign a value to the company). So you can't really look for the traditional value proposition on these companies that live or die by the drillbit. That said, I believe there is a spot in everyone's portfolio for some speculative "value" plays like these because if one gets in early, and the exploration results and flowing bopd are proved up, the rewards can be great. I use the word "value" here to note that these companies, while not explained by traditional value propositions can indeed still be value stocks (albeit speculative ones) measured from a different perspective. But I wouldn't hang my hat on one company. Rather a basket is what I prefer because for every so-so performer, if I can find another Oilexco or Heritage Oil, I am very happy. As to BZP specifically, Ed A (who is very knowledgeable on micro-cap E&P plays) has posted a lot of good info on it including: Message 23900991 Message 23966288 investorvillage.com