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

To: Allen Furlan who wrote (4355)	6/28/1998 8:25:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78751

Allen Furlan: re CMO. Well I looked, but it's too tough for me to figure. I think it's okay on a bv basis-- I read their news release with $705m in equity for 61-62m shares out., so $9 price is below $11 bv. (Although somebody on one of the Yahoo msg threads says bv is below $9 as he calculates it.) And it's definitely been a stock that's been hit -- so a lot of some risk is out of it. (But maybe not all of the risk or the major risk-- maybe that's the crux of it???.) And other numbers might not be so great. Like potential or actual div. cuts. Their ROE per Yahoo was about 20% (although as REIT their taxes would help by being negligible) .. My opinion is that that is a heck of a high return for a company that services paper (Sorry... putting my own manufacturing background into this-- we'd nearly kill for a 20% ROE -- it's so hard to achieve and sustain.) Initiating and repackaging and selling of mortgages seems to be a 'strange and wonderful' business. I can't even tell at this quick glance if other companies I've looked at, or bought, are even comparable. I looked at and passed on RWT (A REIT w/mortgages in the California market --- also a co. down at its lows), and I've added last week to my very small position in UC (they originate and repackage- stock price also down and below book, and with 3000 employees, maybe (I only hope -g-) they might know what they're doing. Not knocking CMO. If Gintel owns CMO, that is a very, very good sign. I've watched (read about) this guy for maybe 15-20 years. He seldom misses. Although he does miss. He can, and will, hold and hold. My history is that I've tried to follow him into his picks, but I get chased out of his stocks before they improve, and so I have not been able to profit from his ideas. Or his calls have been too tough for me to understand at all, at so I've avoided those stocks. They most likely worked out great for him though -g-. My guess would be that if you've done the research on CMO and you like it at current prices, you'll do okay with Gintel type patience. Anyone else... it'd be a risky buy for them. JMO, and as you can see from my recent past posts, -g-, I've been wrong many, many times before. Paul Senior