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

To: Freedom Fighter who wrote (266)	9/1/1998 3:10:00 AM
From: Gary105	Read Replies (1) \| Respond to of 4691

Wayne, which positions are you starting to ease into? I agree 100% with your assessment. Asset or stock fair value is the present value of the sum of future cash flows. Normally low interest (ie low discount) rates are positive for stocks. However if they portend low growth rates, and if the drop in growth is greater than the drop in interest rates, we have a negative situation for stocks. E.g - the US in the 30s, Japan for the last 10 years. Also bear markets typically end when stocks reach compelling value rather than fair value. Abby Cohen has lost a lot of credibility - she is in a bind now. If she stands by her position and is wrong she loses. If she lowers her 9300 target by a lot she can have more of a negative effect on market. My guess is she does the latter during the counter rally in this bear market. Gary

To: Freedom Fighter who wrote (266)	9/1/1998 12:56:00 PM
From: Robert Douglas	Read Replies (4) \| Respond to of 4691

Wayne, You left one very important thing out. Profit margins. Profit margins have been expanding the last several years and are now at the level where I would deem them "unsustainable". That means you have a high P/E on unsustainable profits. Not a good combination. As you mentioned however, this is not a uniform condition among all stocks. There are many "ignored" stocks that are selling at real levels of value. This is where I am concentrating my efforts. -Robert