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

To: Ron Bower who wrote (5241)	11/7/1998 12:41:00 PM
From: MCsweet	Read Replies (1) \| Respond to of 78826

Ron, Thank you for your comment, I think you make a very good point --- earnings growth is important. I will try to address it. I would prefer to see earnings growth, but the strategy is to buy ugly, beaten-down stocks for 3-5yrs until they become fairly valued. I have found that adding too much growth factors into the mix has gotten me into some trouble. (e.g. It lead me to companies like Boston Market that were cheap by all measure because they were fraudulent.) If my screen includes tech stocks, so be it. Note that earnings growth estimates for tech stocks does not always help --- it did not save those people who invested in disk drives or semiconductors in the past year or two due to low PE and high growth. Even in other industries (e.g. oil service stocks), the earnings growth numbers seem to lag reality by quite a few months. However, perhaps I should have mentioned that for all of these types of value stocks, one should always figure out the reasons why they are so cheap and make sure he/she is comfortable with these reasons. Also, I believe a screen based on PE/Growth and relative strength can lead to good growth stock portfolio, but it requires a fair amount of trading and monitoring of your positions. MC