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To: Pierre-X who wrote (2313)	1/20/1998 2:27:00 PM
From: LK2	Respond to of 9256

To PX, John Neff (retired portfolio manager of Vanguard Windsor Fund) is recommending SEG as a value play at current prices (around 18). Message 3196025 When I write >>intrinsic value<<, I'm referring to the idea that a company has value as a business. This is a separate (but related) idea from the company's stock price. Neff isn't stupid. I'm pretty sure he's considered one of the top former money managers. You consider his analysis of SEG and his reasons for recommending it at 18 to be poor or worthless. Message 3208185 You might be entirely right that SEG is a lousy bet right now. But I don't think you're trying to understand the reasoning behind Neff's recommendation. He's not in love with the company or the company's stock. Instead, what he's saying is, that SEG is probably a worthwhile bet at current prices, if you're willing to hold onto the stock for 2 or 3 years. The risk that SEG will go bankrupt (over the next 2 or 3 years) is reduced by its size (it's the industry leader), the cash is has (2 billion), and the fact that it has little debt. This is my explanation of why he gave those facts to back up his recommendation. Value investors are supposed to base their buy/sell decisions on different criteria than growth or momentum investors. Personally, I don't own SEG right now, and I have no idea what the stock will do. Regards, -LK