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

To: Spekulatius who wrote (47033)	3/14/2012 9:35:22 PM
From: thatsnotluck	4 Recommendations Read Replies (1) \| Respond to of 78618

Re: PNX <<This stock was at ~1$ in Sept. 2011. My guess that would define the downside. >> optimist. if everything works out this could make some money, but downside is zero, and if interest rates had not dropped so much to permit the asset values to increase from end 2008, where would they be now? one should read the various disclosures in public documents about unusual transactions and contemplate the implications of those transactions. it would also be interesting to examine the comp packages of the top 5 over the past 5-10 years, and compare that to (1) comp of managements at similar sized companies (go ahead, even count similar sized companies that made decent money for shareholders), and (2) total dividends paid to shareholders, or profits, or .... IMHO you will conclude, as i have, that the company is run for the benefit of management, not shareholders. not as badly today as it was under previous managements, but that IMHO is largely because they are running out of shareholder money to award to management for the results they have produced for shareholders. if you evaluate the stock price of PNX relative to book value, you are looking at a value trap of the worst kind. if you evaluate it on the basis of normalized earnings over a number of years in a fair manner, i think you will conclude the price is extremely high relative to underlying earnings, UNLESS they get their expenses in line. if you compare their average expense per policy to other life insurers i think you will want to check your numbers a couple of times because you will not be able to understand how their expenses could be so high as compared to the competition. and then if you compare what their expenses per policy would have been if they had a comp policy for the top 5 that was more like other companies of similar size and performance, i think you might say 'ahh, the difference is to a large degree excessive management salaries'. and then if you think to yourself, 'well, someone needs to take them over and strip out those excess expenses. should be easy enough to do.' i invite you to circle back to my conjecture that perhaps the company is being run for the benefit of management, not shareholders. but if everything goes just right, one could make a little money here. personally i do not think it is a very attractive risk/reward proposition, which is what i think Mr. Clownbucks is saying. but i often find myself agreeing with Mr. Clownbucks. all in my extremely humble opinion, please do your own DD, YMMV, etc.

To: Spekulatius who wrote (47033)	3/14/2012 11:10:42 PM
From: gizwick	4 Recommendations Read Replies (2) \| Respond to of 78618

Investing style differences are what make the difference between good yearly returns and mediocre or losing ones. My investing style is to find stocks that the herd has not discovered yet and wait for the company's stock to be discovered. I have done very well with that approach, beating the S and P handily for the past ten years. I am up 14 times what I started with in my IRA. This is why I accept some risk in some of my portfolio holdings, because when you do buy a stock that has some risk, your returns are much greater when companies reorganize their business plan and make profits. Yes, I do leave it to the personal investor to do their own due diligence after mentioning some of the recent highlights. These I glean from reading recent financial reports, CEO interviews, and other information. Information like PNX's teaming up with State Farm and Edward Jones to offer insurance to clients. In the case of PNX, we have had other people here mention the company and I didn't know how much was offered up for information. If I didn't think that the company had potential I certainly wouldn't mention it. I just am of the opinion that the positives outweigh the negatives, and I purposely waited to buy shares in PNX until more was known about their reorganizing efforts and their plan. In the case of PNX and the proposed stock split, I think that since this is an earnings driven market of stocks, in the final analysis it will probably be a positive for the company, due to more mutual fund purchases, and greater liquidity. I just witnessed some of your lag the market after the split story in RES. I sold out prior to the split taking place due to that very concern and it did sell off. Sometimes people get upset that they didn't buy shares in the XYZ company after seeing the PPS go up six times. If you are too cautious in buying stocks and only look at the possible negatives you never put yourself in the position for good returns. You might not lose, but you never will have those multibaggers either.