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

To: Roger Thrash who wrote (4431)	7/15/1998 11:04:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78717

Roger Thrash: IMO, in addition to the stocks you mention, you also bring forth some serious issues for value investors to consider as regards investing in net-nets. Not sure I'm ready to confront those issues yet in myself. Something to do with how I -- and some others here -- apparently are investing in net-nets. I/we-- perhaps unlike you, and perhaps unlike Ben Graham-- are putting some spin on the method -- like maybe we want a viable (viable in the sense of growing, real) business. This has led me to censor my list of potential stocks in which I will invest. Not sure if this is good/bad or right/wrong. Seems to work for some though. You've caused me to reflect that perhaps you are one of the real true Graham net-net disciples (buying a package that meet the criteria and holding them the requisite time). And given today's environment, to own and see a package of such dreck in a portfolio month after month is very hard on the ego/eye/cocktail conversation (even if offset by $ gains and margin of safety). So I salute you. If "all" the net-nets have worked out for you, you must be lucky, smart, VERY patient, or only investing in a few over a few years, or a combination. Anyway, my cap's off to you also. Nice call on CSEP-- I had thought $1. 1/4 might work, and I had a chance, but lost my nerve I think. I've looked at FLYT based on your post, and I think it also is a good buy-- so I've started a small position today. Not sure where your numbers are coming from though. Based on the SEC 10QSB of 6/5/98, I'm looking at $31M in working capital (& no LT debt) which I suspect is mostly cash/cash equivalents with 20M+ shares outstanding. This seems to be a company liquidating everything they can. Essentially, they are money looking for a business. So the bet is that they won't squander the money. This is what you've forced me to reconsider AS BASIC: Value investors are people who buy $1 for fifty cents. So from what I can see with FLYT, I am getting about $1.5 cash/sh for the $1 per/sh (approx.) stock price. Which is buying $1 for sixty-seven cents. Well, that's about as good as it gets for me w/net-nets. I just don't see -- and this is just me -- how I can call myself a value investor (which I do sometimes)-- if I don't include this one (and of course, within a well-diversified portfolio). Thanks, I think -g-. And obviously, I hope this FLYT continues your record for working out satisfactorily. Paul Senior