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

To: Jyoti sharma who wrote (2861)	12/22/1997 10:29:00 PM
From: jeffbas	Read Replies (2) \| Respond to of 78700

It has not dropped much more than PD. This says the industry has gotten cheap not just the company, which means that you have to review the whole industry to decide the best investment. I read the reference. The only things that turned me off was initiating a stock buyback program when the stock was very near all time highs, the dependence on China to keep the industry from having a lousy tone for the next few years, and the apparent short term dependence of earnings on recent futures contract sales. Major investment in South America deserves some haircut. Copper price is consistent with poor worldwide economies. If you think that is too pessimistis, then any of these companies is probably a buy. The level and trend of interest rates in arguably the best economy, the US, suggests that buying this stock or stocks in general is more speculative than usual. But there always comes a point where that is reflected in the price. I would probably prefer to see a few poor earnings comparisons together with some stability in the price before buying.

To: Jyoti sharma who wrote (2861)	12/22/1997 11:01:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78700

Jyoti Sharma: re copper stocks. I don't believe anyone can predict accurately copper prices next year. Analysts have recently downgraded at least two of these stocks - AR and CYM, and one fellow is predicting a further fall in stock prices about 10-20% from current levels I believe. Nevertheless, current stock valuations discount a lot of bad that will or could happen. I bought CYM today- I like that they are diversified (with coal), that they are paying off debt, and that they pay a good dividend - which I'm expecting will be cut. AR would also seem to be a good bet (in some ways --a better bet -g-) in which to start building a position. As you say, AR is at a multiyear low --in a couple of years stock will (or could or should -g-) be 50% higher. I don't see a deflationary environment that would really impair the long term viability of these companies. Paul Senior