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

To: Robert Graham who wrote (2927)	1/4/1998 2:24:00 PM
From: Ron Bower	Read Replies (1) \| Respond to of 78526

Bob, Feel the same on utilities. I just had an interesting conversation with a local Union electrician. He's starting six months of work at Commonwealth Edison next week. Seven days a week, 12 hour days, $28.00 per hour plus benefits. Over $4,000 a week. Cost to company over $6,000 per week. IMO - Utilities have a government mindset that prevents profits in an open competitive market. With deregulation and time, the weak will be weeded out and the strong survive, but which is the weak and which the strong? The trick is chosing correctly. This goes to the argument about management track record. In the case of utilities there are no track records for management because government regulation has given them a guaranteed profit. Utilities have always been a good income stock due to their high dividends, but with highly unionized labor forces, EPA restrictions, and no history of profit incentive, deregulation may mean utilities are in for a rough ride. JMHO, Ron

To: Robert Graham who wrote (2927)	1/6/1998 4:20:00 PM
From: Wink	Read Replies (1) \| Respond to of 78526

>>Utilities are not growth stocks. Utilities do not make good value investments over the longer term. I do not understand why this has changed. Have I missed something here? I think there are much better ways in making money with a very manageable level of risk.<< Bob, as a utility person I can agree and disagree with the above. Historically speaking you are right, utilities do not make good value investments over the long term, but with deregulation comes the chance for utilities to go beyond their core service offerrings. My utility is in the home security business, sells and services water heaters, and is about to offer private line maintenance and other home appliance repair. We are also looking at power marketing and energy services in the near term. I can also agree that there are much better ways to make money with a a lot less risk. Those utilities that do it right though will add a lot of shareholder value. Note that "shareholder value" is the driving force behind my utility (BGR) and is probably so with others as well. ;>)