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

To: Spekulatius who wrote (39665)	10/14/2010 7:02:33 AM
From: Madharry	Respond to of 78673

My 2% position in yahoo turning profitable over takeout talk. Seemed clear to me that there was enough embedded value that someone would be able to unlock it eventually. I hope yahoo management handles this a little better for shareholders than previous management.

To: Spekulatius who wrote (39665)	10/14/2010 12:09:14 PM
From: Paul Senior	Respond to of 78673

The asbestos liability issue got more attention in the media about ten years ago, and so correspondingly, also here. At the time, the respected thread contributor here, professional value analyst and then fund manager, Jim Clarke, recommended to just avoid any stock with asbestos liability because it was likely you couldn't quantify the risks (exposure costs). That advice served me well, if I remember. Basically, if a hard-core analytical guy (Jim Clarke) couldn't ascertain the risk/reward proposition, then that killed it for me. Maybe issues/risks/numbers are more clear to analysts now, now that it's about a decade later. Still for me, if I see any company that has asbestos issues, I automatically avoid it.

To: Spekulatius who wrote (39665)	10/17/2010 2:42:47 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78673

re OI - interesting enough, Barron's has a piece about OI (Bottom's up". Barrons article mentions their valuation, emerging market exposure but does not mention the asbestos liability. This is not a small omission; last year, OI paid ~180M$, before it was ~250M$ and in 2006/2007 ~ 120M$. you would think that considering they got out of the asbestos business in 1958, the claims would run off but so for it seems that they are on track for another 180M$ in 2010. Well, these are pre-tax expenses of course but I think the NPV of the asbestos claims post tax is at least 1B$. Considering that the EV value of OI is ~7.4B$ (which does not account for the asbestos liability), that is not exactly a rounding error. if I assume an adjusted EV of 8.4B$, most of the valuation discount to peers is gone.