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

To: Spekulatius who wrote (62322)	8/4/2019 12:57:38 AM
From: bruwin	Respond to of 78752

Here's hoping you continue to make healthy profits from WMB, for whatever reason ...

To: Spekulatius who wrote (62322)	8/4/2019 5:42:54 AM
From: bruwin	Read Replies (1) \| Respond to of 78752

OT. After reading your comment .... "I interpret these as opportunities to trade this stock." ...... I thought I'd make the following observation and point ..... There are quite a few ratios out there that have been formulated by well known market "Gurus", and the like, and as such they've gained acceptance and "popularity" over time by many in the stock market environment. Whether or not these ratios have ANY BASIS IN FACT is often not questioned. The mere fact that an individual of "Prominence" promulgated it is enough for the "audience". One has to wonder, at times, as to the understanding of basic maths of some of these "Gurus". With that in mind, and with reference to your statement that "So far, it has worked well for me", one has to wonder that what has probably been happening here is that many other folk are also following the moves of these EV's and EV/EBITDA's and are reacting accordingly, which in turn moves the share price in sympathy with the 'promulgations' of those ratios. In other words there's a "Market Club" who react very much in unison to the "theories" behind these ratios and thereby give Credence to their "formulation", and in so doing a share price, at any one time, is assumed to be a "Buy" or a "Sell" because of the current "Valuation" of that company. And like I said, for the "Value(?)", or Takeover Cost, of a company to change, IN EITHER DIRECTION, by MANY Billions of dollars, in the space of a month or two, on a fairly ongoing basis, just doesn't seem realistic. Let's take that classic stalwart stock, KO, around the time of the 2008/2009 market crash .... At its low point in that period KO was at ~$19/share. Based on its 10K at Dec.2018 its EV was around ($19 x 2 315 000 000) + $2 781 000 000 - 4 701 000 000 = ~$42 100 000 000 Based on its 10Q at Jul. 2019 its EV was around ($25 x 2 313 000 000 ) + $5 017 000 000 - $7 647 000 000 = ~$55 200 000 000 So the EV, or "Takeover Cost", of Coca Cola changed by about $13 BILLION in just 4 months ?! I suspect that one would have had to pay a Lot More than $42 Billion to take over Coca Cola !! Of course, that's not taking into account that it's highly unlikely that Coca Cola would ever really be in the market for a Takeover. At the "last count" KO's EV was around ~($52 x 4 269 000 000) + $29 296 000 000 - $6 731 000 000 = ~$218 000 000 000 >> $42 100 000 000. All one now needs to do is to find a Buyer ! But Hey ! .... if EV and EV/EBITDA works for you, then go for it ...... I hope you make a ton of money !