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

To: Andrew who wrote (5411)	12/14/1998 1:26:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78742

Andrew: re: best value plays. Yes, my experience is similar to what you report. For example, with these small value plays -- microcap (under $75M) stocks selling at net-net, they seem to take forever to work out. (So, IRR is reduced). I think Ben Graham in Intelligent Investor says stick with larger firms. (Although in some writings, he just says (I think) that he bought a basket of such stocks. )Perhaps these larger companies, because they are familiar to investors - or more familiar than dinky microcaps - there's more of a chance that someone will bid them up to fair value or higher and sooner than with microcaps. Anyway, I've not had very good success with net-nets, but I keep trying. (Idea is sound; perhaps I just don't have the requisite patience to hold, plus there's a dearth of these kinds of value stocks now.) Buying low pe and low p/bv stocks has been much better for me. Here again though, it's been better when growth or momentum investors pile in later on. In one recent example, I bought a home builder at mid teens, sold some last month at mid twenties a year later. The same day I read SI posts in beaten-down-stocks-poised-for-a recovery-thread where the thread owner now recommended her followers buy it. Similar with VVTV which I bought last year as a value stock (and it still may be), but profitably sold a couple of weeks ago as VVTV got pulled up in the internet craze. For me, I seem to do better when I just sell since my ruling reason for buying was that it was a value stock. When I start thinking they're now growth stocks, I succumb to holding and I seem to lose out. Paul Senior