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Strategies & Market Trends : Fibonacci Dynamics -- Ignore unavailable to you. Want to Upgrade?

To: sammy™ -_- who wrote (267)	1/31/2008 2:42:29 AM
From: bruwin	Read Replies (1) \| Respond to of 330

$ammy ™©©™, I often find that your posts contain interesting comments based, I think, on your own personal views and outlooks. I also suspect that you have had some in-depth grounding in the science of mathematics and/or statistics. But that’s just my own observation .... I could be off the mark ! The first part of your #267 could be regarded as a bit "esoteric", while the second part, with its references to "Good Value" and "Bad Value" could, indeed, be the case. The way I see it, however, is that one could often miss out on investing in good, profitable companies by putting too much focus and emphasis on larger sectors and sections of the stock market, and then avoiding those sectors/sections that fall within a personally defined "Bad Value" category. Buffett (apart from playing bridge) advises that one should Ignore the Macro events, and rather concentrate on the business specific Micro events. He suggests "Concern yourself with the long term prospects of a business rather than attempting to predict the short term fate of the stock market." It’s been my experience, that when all is going as it should be in the "financial engine room" of a company, this performance is reflected in pertinent, strategic areas of a company’s financial reports. It’s difficult for it not to be the case, or vice-versa. So one may find that shareholder value could certainly be found in pre-determined "Bad Value" areas, as much as in "Good Value" areas. It’s just a case of where to look, what to look at, and most importantly, what is really relevant, in order to be confident in one’s investment decisions with regard to Individual Companies. With regard to your two "Value" areas, I’d agree that "Low Cost Producers" and successful "Franchises" would be good starters. "High Leverage" and "Commodity Pricing" may have to be carefully considered. "High Leverage" smacks of high debt expense on the Income Statement which erodes Bottom Line profit and, thereby, shareholder value. "Commodity Pricing" could possibly contain mining companies whose results are very much dependent on the current market price of their individual resource, over which a company’s management generally has no control.