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Pastimes : John Dessauer's Investors World -- Ignore unavailable to you. Want to Upgrade?

To: doug5y who wrote (1616)	10/2/1998 2:41:00 PM
From: Diogeron	Read Replies (1) \| Respond to of 2346

I keep looking at Citicorp and thinking this may be a great time to get in on "one of our great companies." On the other hand, I've had the hell kicked out of me with my Ericy, ESF and STD exposure, so I'm tempted to go with a safer non-bank company, like CCR, which I already own (and still have a profit in). I will be very interested in his comments on the Hot Line tonight and on the next newsletter.

To: doug5y who wrote (1616)	10/3/1998 11:53:00 AM
From: Ralph C. Cinque	Read Replies (2) \| Respond to of 2346

To console us for all the money we are losing on SFA, Dessauer pointed out on the hotline that when this kind of thing happens, it is likely that the company will start buying back its own shares, retiring them, and that that will in the long run increase the earnings per share since there would be fewer shares outstanding. He almost had you thinking that this is great that the stock crumbled. But any cash the company uses to buy back shares reduces their total cash assets and therefore, their assets per share, which is another measure of valuation. He talked about the 250 million in cash that SFA has, but that 250 million wouldn't be there if they bought shares with it. So, this is a little like robbing Peter to pay Paul. You can't have your cake and eat it too. The truth is, that the impact of buying shares in the company is the same for the company as it is for the individual: if the stock goes up afterwards, it was a good move, if it goes down, it was a waste of money.