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

To: James Clarke who wrote (5213)	10/30/1998 9:12:00 AM
From: Paul Senior	Read Replies (3) \| Respond to of 78526

Jim. I'll have to think about this. I do think that if a company paid a fair price for a company, then good will is a realistic component of book value - because if the acquiring company had to sell the acquisition, a new buyer would be willing also to pay for the good will component. I also assume -- have no facts to support this though-- that most transactions among 100M publicly traded companies involve the payment for goodwill component. Acquisitions aren't made for net book value of the acquired company (unless the acquired company is distressed). The issue maybe involves "fair" price. If the acquirer wildly overpays, then book value obviously is that much more distorted. I am so used to assuming earnings are overstated and hyped by companies, that I just automatically look for ways to subtract stuff from "their" reported numbers. But I am wrong. Maybe too much automatic instead of thinking about it. As a value investor, I should be trying to get the intrinsic earnings value - and that may mean adding back into earnings. I'll have to think about it some more. Yes, Clayton Homes. -- If it drops to lows, I'll consider it. Sorry I missed JOE at 20 couple of weeks back. Paul