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Non-Tech : Claire's Stores (CLE) NYSE -- Ignore unavailable to you. Want to Upgrade?

To: Brad Bolen who wrote (478)	12/8/1997 7:24:00 AM
From: Al Morford	Read Replies (2) \| Respond to of 619

There has been some great discussion on this board comcerning Claire's. ( Generally, most people on these boards are uninformed and unsophisicated investors.) I am an independent investment broker with over 25 years in the business. I have been following Claire's for over 20 years and have owned and traded the stock 7 times in the last 20 years. All trades have been sucessful and the last time I sold was a 4 bagger. I was a heavy buyer in the stock in Jan & Feb of 97. I know this company very well and here are my general thoughts about the company and stock price: 1. The biggest challange and risks for Claire's is inventory obsolence . Teenagers are a very fickle group of consumers. What is hot today may not be so hot tomorrow. Over the last 4 years or so Clair'e has done a great job with inventory. However, in the past the company has had periods in which they lost tons of money because they didn't have the right goods in the right amount for the right price. The stock was hammerred because of this. REMEMBER THE BIGGEST RISK IN OWNING THIS STOCK IS INVENTORY RISK BECAUSE ALL OTHER THINGS BEING EQUAL, THIS WILL HAVE THE GREATEST IMPACT ON PROFITS. 2. Claire's is very volitale and the stock often has irratic moves on a slight changes of perception. For example, the move from 23 to 19 was related to some institutions correctly noting that same store sales for November were flatening out. This cost 4 points on the stock and should not be viewed as unuasual for Claire's. It has been my perception over the years that institutional holders of the stock are as fickle as Claire's customers. 3. With the exception of invetory control, Claire's business is rather simple to execute, and this concept works. Long term, new growth will come from acquisitions. Claire's has capacity of 2000 stores and they now have about 1700.... For long term investors the current price of $19 may be a bargin. Upside, looks like 30 in two years if the inventory is right. AL Morford at almo1@visi.com

To: Brad Bolen who wrote (478)	12/8/1997 10:54:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 619

Brad, I invest and I do not throw darts and I do significantly outperform the averages and I don't use TA. This is what I do: I seek out growth stocks in growth industries whose prices are not outrageously high compared to their expected growth rates. I buy those companies and hold them so long as the fundamental growth story remains intact. That's why I'm on SI -- to keep abreast of the news, so that if the fundamentals on CLE turn negative I can get out timely. I subscribe to the weak form of the efficient market hypothesis (a position for which a lot of statistical evidence exists) so it's important for me to be able to keep up on the news. That's it! The entire system! The whole enchillada! And, on an annualized basis my portfolio is up over 50% this year. I also just recomputed my annualized returns from January 1, 1987 (note that this is before the crash!) through December 5, 1997, and that came in at about 31% per annum. I've been investing since the mid 60's, and had mixed results until I adopted this method around 1979. My investment approach is easily mimicked by anyone. There is nothing inherently difficult about it. And it makes extensive use of modern portfolio theory as its underpinning. It also has two tremendous advantages over timing: it avoids excessive transaction costs and it minimizes capital gains taxes. I once did a study on the impact of these factors and found that a 40% annual rate of return could be reduced to under 24% in an actively traded account after taxes and transaction costs. Financial analysis of a company is very important (but not predictive). It essentially has two uses: 1. You can eliminate companies that are financially weak, and thus have a greater potential for bankruptcy than other companies; 2. You can gain an understanding of the dynamics driving the profitability of companies; for example, while I made a great deal of money in IBM this year, after closely scrutinizing its financials I eliminated it from my portfolio because it was generating increasing profits through cost containment rather than increases in sales. Regards, Paul