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

To: Joseph G. who wrote (4879)	8/30/1998 11:36:00 AM
From: Terrapin	Read Replies (2) \| Respond to of 78510

"Suppose P/E is negative, div is cut twice, book is written off ... IMO these are some very likely scenarios. So what do you look for in a company in this environment? In contrast to past years I assume declining earnings and try to judge the company's ability to maintain cash flow and dividend. Dividend has been my latest area of education and my particular concern is the safety of this dividend. Graham was always conscious of the quality of the dividend and its place in the valuation. But Hell, if the Fed lowers rates as some have suggested, the dividend of even a no-growth company like US Steel starts to look attractive! <g> But here's my question: For the past decade companies have forsaken a healthy dividend yield for stock buybacks (if this assertion is wrong please correct me). If they have not disposed of those shares, and assuming a further decline in the stock market, then will the reduced value of those shares show up as lower ROE on the balance sheet? Just wondering, John