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

To: Wink who wrote (2952)	1/6/1998 6:49:00 PM
From: Robert Graham	Read Replies (3) \| Respond to of 78530

Yes, I can see where deregulation will open up some possibilities for some utilities to increase shareholder value. I see from a quick look at a couple utilities that some companies have went abroad to purchase or build other plants. I think it is a big unknown at this point as far as which companies will end up in the long run succeeding in the new business environment that deregulation provides. I think there will be some casualties, and also costly learning curves by the companies that do survive and actually utilize this period in time successfully to increase profits. I think this situation needs to sort itself out a bit and take form before an intelligent value-oreiented investment choice is made. Now there are probably allot of speculative plays available at this stage. Just my opinion. Still, a utility specifically involved with appliance repair?? I have rarely seen a diversification (spelled diworsification using the Peter Lynch dictionary) like this work. For one thing, there is no synergy involved here that I can see. Considering the asset value of a utility company and compare that with the money that can be made through appliance repair efforts, how can the income derived from the appliance repair side of the business ever be worth the company's efforts by showing up on the ballance sheet as a significant entry? Odd. But the point you are making here is well taken by me. On the utility front, what other areas do you see that utilities will consider as new future business? I am trying to put myself in the shoes of the President of a utility with respect to figuring out how to capitalize on what opportunities deregulation will provide my company, but I am having difficulty here. It is easier to see how deregulation can take what profits I have away from me. Perhaps electric cars??? Bob Graham