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

To: cfimx who wrote (513)	10/26/1998 4:41:00 PM
From: Tomato	Read Replies (1) \| Respond to of 4690

Anyone like Singer (SEW)? It's a franchise name trading below book, I think. Value Line has it as one of its top stocks in the 3-5 yr. price appreciation screen. Here's the financials from Stocksheet: stocksheet.com

To: cfimx who wrote (513)	10/26/1998 4:49:00 PM
From: Axel Gunderson	Read Replies (1) \| Respond to of 4690

Oops! I'm eating worms on this one. Sorry, Twister. You are right - it was I that was reading the question wrong. Still I don't think stock market response is a good way to value the company's business performance. Your post in fact gives the reason for this - there is a difference between voting and weighing. Back in post 457 I offered another method for evaluating business performance, which gets back to the original problem: If somebody really wants to quantify business performance, it makes more sense to take year to year growth in free cash flow over the previous years free cash flow so that one can see how they are vesting resources currently. Axel

To: cfimx who wrote (513)	10/27/1998 12:01:00 AM
From: James Clarke	Respond to of 4690

A very good argument, using Buffett's logic on market value created per dollar reinvested. It clearly applies to Microsoft. They have been absolutely the best in this respect. But this is not what Buffett uses to value a company, it is what he uses to determine appropriate dividend policy. A company (Microsoft) could create huge value per dollar reinvested and still not be a buy at a given price. I also like the argument about the circularity of Buffett's logic. I was trying to put that same thought into words a couple days ago, and finally gave up because I couldn't put my finger on what I was thinking. That was exactly it. Thanks. Jim