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

To: Investor2 who wrote (5710)	1/11/1999 2:41:00 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78715

I2: Actually I think a key point underlying the discussion is: Does valuation work? Here's a quote from street.com today..an interview with Blodgett that called AMZN @400 pre-split [=133 today] as a 1 year target: "Blodget: It's a long-term buy. I'm not going to whip it around. There's a good chance that maybe the stock will come back next month and then the 400 target will look okay again. By any normal valuation model, these are the most expensive stocks in history. And what history has told you about these stocks is that valuation is a lousy tool for valuing stocks. Stocks don't go down because they are overvalued. Arguably Yahoo ( (Nasdaq:YHOO - news) ) was overvalued when it went public, but there was so much potential." Is "Valuation a lousy tool for valuing stocks"? The theme of this thread is that valuation and fundamentals matter and that when share prices are out of line with the fundamentals, they will regress and the investor who is willing to endure some pain if prices get further out of line will eventually profit. Sometimes this means buying out of favor, beaten down stocks where fundamentals are better than price reflects. Sometimes it means shorting overvalued high fliers. The recent discussion is about how to do this and stay within risk tolerance parameters. I don't think short selling should or will dominate the discussion on this thread very long, but most long side buyers can benefit by using short side analysis tools...it improves perspective IMO. Also discussion about how not to trade outside risk tolerance can be constructive as well.

To: Investor2 who wrote (5710)	1/11/1999 2:51:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78715

Aww, we're just having a little diversionary break, Investor2. -g- But here's a company you might look at: Transatlantic Holdings. (TRH). A General Re type for you Buffett fans. Rising earnings and relatively (to itself and to the market) low pe. Expensive though for me based on bv. But AIG (Ace Greenberg) keeps increasing its buy of the shares. I think TRH is a good long-term investment (perhaps of the kind you might like, Investor2). I'm starting a small position in TRH today @ 76 1/4. FWIW, and I've been wrong many, many times before.