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

To: Paul Senior who wrote (4928)	9/1/1998 6:42:00 PM
From: Brendan W	Read Replies (1) \| Respond to of 78498

I bought some Brunswick (BC) today. Largest US maker of leisure and recreation products, P/B around 1, PE under 8, LTD as a percent of capital is 30%, yield is over 3%.

To: Paul Senior who wrote (4928)	9/3/1998 12:33:00 AM
From: Paul Senior	Read Replies (2) \| Respond to of 78498

re: X. Somebody here mentioned US Steel and its 'high' dividend. Looked back, couldn't find who. I looked at X, and there's a lot to like about US Steel at current price relative to some typical valuation numbers. This makes my investing life difficult and I hate that -g-. Our biggest steel company ---getting hit from all sides -- mini mills and every single Asian producer, and Latin Am. too. X, a commodity producer of the 19th century. I can't imagine anyone in their right mind buying or recommending this stock. But I see apparently some brokerage firm is actually saying it's a buy. Rev's have increased every year since '92 (far as my database goes). Debt is decreasing, but sh. outstanding increasing. Looks like in past few years, ROE is running at 20%. (I hadn't a clue-- such a company can actually earn that good a return?) Price is down close to book value (Now with steel companies, we KNOW that could be negative -- maybe 1/5 of bv might be attractive.) Actually, there's been pretty good reported earnings (And we KNOW with steel companies, reported earnings are well... just reported earnings) The dividend has been $1 for several years. The key for me though is that on a relative dividend basis - a model I use to determine buy/sell points for large cap/dividend payers -- it looks like the dividend yield is at the highest point in the past 10 years. Which would mean X is a VERY good buy now. I just don't believe X is ever a good buy. However, assuming that the world isn't coming to an end, and that steelworkers don't decide they deserve to make more money than the President of the USA, and that X could muddle through, I will probably initiate a very small position and attempt to hold for 2-3 years.