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

To: IndependentValue who wrote (52108)	8/13/2013 8:38:57 PM
From: Paul Senior	1 Recommendation Recommended By Sergio H Respond to of 78717

WDC. For me, the way I'd look at it, if I were considering a buy, I'd say WDC is cheap on a roe:p/e basis. It's a buy. Otoh, the stock is up near highs and it's not been a steady climb. If you bought in '09-late '12, depending when you bought, maybe you'd have to have held a couple-three years to see a decent gain (when the stock moved up from late '12.) Or trend-trade the stock. finance.yahoo.com So maybe this could again turn out to be one of those cheap stocks where fundamentals continue positively, yet the stock lags. For me, I'd consider that this stock may have moved up with everything in the market, and may move down with it too, if the market corrects. Another way I'd look at it is that I'd not want to pay more than 2x stated bv for the stock, based on some metrics/formula I sometimes use. That means I'd be nervous paying now about $68 for a 2xbv = $73 dollars. At $73 I might want to be a seller, depending. Well that's how I look at it if I were to be a buyer now. However my buys were 9&10/ 2012, and I'm content to just continue holding. Which I'll do. Not planning to add to the position. All jmo, given my situation/viewpoint. Others may see the stock differently.

To: IndependentValue who wrote (52108)	8/13/2013 11:27:10 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78717

Thanks for you blind valuation exercise in WDC - certainly and eyeopener. Now I did went to your blog and noted that your sample portfolio (launched on 3/16 this year) is 100% in cash! So, I guess that answers Jurgis question and you didn't buy this stock. Instead, you seem to be concerned about the lack of values in the general market. This seems go be an interesting lesson in itself. Now I understand that one is concerned about the market being at all time highs and such, but we look at individual stocks and absolute values here. A stock is either a value or not, if something I like trades for 80c or less for the $, I am going to buy some. Sure, the same stock could and very likely will go for 70c on the $ if the market really tanks but is that an intelligent bet to make? That aside, I like your reasoning and concise writing and think you will be a great addition to our little community here. Slante!

To: IndependentValue who wrote (52108)	8/13/2013 11:59:29 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78717

Returning to our past discussion about WDC and connecting it to what you wrote: You say "a commoditised industry with a positive growth outlook" And you say Consistent 10 year track record, with revenue CAGR of 20%, net income CAGR of 30%, and FCF CAGR of 49% over this period And I say that $64M question is whether you are right about positive growth outlook and whether the last 10 years is repeatable in any shape or form. Clearly the market doubts (even with the 80% runup in last 12 months). So really the rearview mirror does not help much when you analyze a tech company that might be on an edge of transition that might make it largely irrelevant. And though I appreciate the work you put into your analysis, I wonder if there was a good ROI on that work. IMHO, not. :) Note that I hold a significant position in WDC. So don't call me a bear. :) I only think that anyone who would recommend this stock as a buy has to answer the questions about the future first. And IMHO that's largely impossible without a crystal ball. :) And that's the reason my position in WDC is largish, but not huge.