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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Boyd Hinds who wrote (682)	8/27/1998 5:21:00 PM
From: Axel Gunderson	Read Replies (3) \| Respond to of 1722

Here are some companies that on first glance seem very inexpensive on the basis of cash earnings. Additional investigation needed to verify they are indeed cheap (and safe). Cooper Tire and Rubber (CTB) Nalco Chemical (NLC) Armstrong World Industries (ACK) Avnet (AVT) Deere (DE) Snap On (SNA) Liz Claiborne (LIZ) Toys R Us (TOY) Banker's Trust NY (BT) Adobe Systems (ADBE) Computer Associates (CA) Parametric Technologies (PMTC) quote.yahoo.com. Axel

To: Boyd Hinds who wrote (682)	8/27/1998 5:35:00 PM
From: Axel Gunderson	Respond to of 1722

Hey Boyd: Thanks for the post. I don't have much data on 72-75, and I was unscarred by the experience, since I started in the early 80s. Sorry I can't help. I'm also seeing some cheapo microcaps, mainly companies with which I have other reasons to be familiar. I have not made any purchases, but if I were to do so (and this holds true for larger companies as well) I would put in some real low-ball GTC orders. This is just gut, but I think we are going to see some panic selling before this is over. If there is a period of panic selling, then it will be possible to take our time on buying, and some truly great companies may be on sale. While the potential rewards might be higher with the microcaps, my tendency is to take the lesser outperformance and the concurrent lesser risk of my bad judgement. Axel

To: Boyd Hinds who wrote (682)	8/29/1998 12:25:00 AM
From: Bob Rudd	Read Replies (2) \| Respond to of 1722

Mid 70's versus current. Inflation was a major driving force in the 70's not so today. Small caps often do relatively better in infaltionary times since they are often the marginal producers. During lean times they get table scraps, but when demand exceeds supply, these marginal players can earn excess profits that has greater impact due to small size. The relative underperformance today appears to be more driven by liquidity issues. The funds that are the defacto allocators of capital are concerned about roach motel affect of small caps [Can't get out in selloff] and since they are driven by quarterly performance, they tend to gravitate to the momentum issues - that's not small caps. The trend toward index funds, which are capitalization weighted - big get bigger, exacerbates this effect. All this IMO. Regards, Bob