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To: Razorbak who wrote (38110)	2/24/1999 10:17:00 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

Razorbak; A question for you... First; I gotta know ? Where you down in Arkansas when ''The Man'' Lou was there ? On topic: Razor, I've read your posts on other boards and know you ''have a clue''... Also, know you've apparantly dipped more than a toe or two into the Oilpatch in the past - lot's of E&P's - correct ? So my question is; as a ''Work-out'' specialist (from your Web links) you of all people should recognize the benefit of buying assets cheaply at market sentiment bottoms. More important than that obvious elementary concept; - you surely; know and respect - ''real world'' models vs. market sentiment gloom & doom ? I am referring to those who stood with cold stares in their eyes, ice water in their veins and bought the Citicorp's @ $10 and the S&L's for pennies, or buying commodities in the past sentiment crashes of old... Allthough - from your profile link; I realize that your were in Junior High-High School at that some of those approx times - NOT; that being so, is a negative, or is relevent to your ability etc - please, don't misunderstand what I mean here... I merely point out that of course there are brilliant people involved in the markets currently in the early 30's and 20's - I am of basically your age group as well; my point is that the ''real world'' experience of those who ''have been there and done this'' on more than one occassion, is being virtually totally dismissed by investors imho. Those who have NEVER experienced a true Bear market, who have never experienced even one complete commodity cycle in their adult lifetime are getting a litttle too ''confident'' here imho... <<No joke. Just reality. That's what happens in an over-capacity market. Used equipment prices plunge to very small percentages of actual replacement costs for new equipment.>> ***per your above comment; I think you presented the Question and not the Answer... Sure; we all know that negative business enviroments can bring asset prices to seemingly unbelieveable levels. However imho; what separates the winners from the losers, from the observers; is knowing when & where to buy ! How cheap is cheap ? How many potential buyers of entire companies, or assets of every type, totally miss opportunities because they fail to separate mathematical -historical asset valuation models from sheer market emotion & sentiment ? I think that far, far more people miss the boat - waiting for cheaper prices than those who execute on a model based on historic facts. I'm not throwing you into that camp; I would draw the conclusion that you are cautiously optomistic perhaps... but, my question is to your direct experience in the real world of ''Work out'' Mangement: I am familiar with work done by Jay Alix & Assoc among others in your industry. Those in this industry seem to be a great source of endorsing a concept that I buy into here; that being that the vast majority make not only ''timing'' mistakes - but, also more often than not - make value assumptions more often - too far to the downside; than too high to the upside in Business/Industry Valuation Models; and miss great opportunites to buy assets in negative sentiment enviroments. Citicorp and the S&L's were the poterchild examples when sentiment runs so rampant, that the masses so discount the numbers; that they totally miss opportunities... When emotion so dramatically overshadows logic; one has to trust the numbers/models imho... Right now; those who have ''been here & done this'' are trusting the numbers/models.... Imho; we are in a very comparable scenario to the Citicorp, or S&L crisis-sentiment bottoms of past. My question to you: Isn't it highly possible that history is repeating itself ? Don't more companies miss great buyout opportunities by being too negative, than by being too postive in enviroments like this ? If we agree to disagree - no problem; but hopefully we have identified the real question here; that being - how cheap is cheap ? At what levels does the concept of deadmoney, or potential lower bottoms no longer have the risk vs. reward return potential of buying now ? One can wait for everything to go to zero ? However even Warren Buffet decides to pull the trigger sometime... ie: <<That's what happens in an over-capacity market.>> Even in the LBO world - pulling that ''trigger'' is such an emotional decision as opposed to a logical/mathematical one. I feel that in times like these - only those that trust the numbers/models and can shut off the emotional hysteria will flourish... By ''flourish'' I refer to often used market bottom models- and as being able to seize/execute in the short windows of opportunity that the market presents. As an example - bottom spikes often present themselves as short windows where 20-30-40% discounts to the baseline bottom of a cycle may exist for only weeks, or months. For example if OPEC announces new cuts - the window will be closed; and quite conservatively one can draw that the bounce in the OSX would be to OSX 60-66ish- 72+, which is a near 50% move from here. A target of OSX 60 -72 ? - Why wouldn't it be - it went there 2-3 times in the trading cycles since the Sept Market Crash. If the OSX traded to these levels in times of total uncertainity in the overall market, not knowing what Russia, Brazil, Long Term Capital, the FED, OPEC or Japan would do - what do you think it will trade to; with all of those situations now answered and new OPEC cuts ? The concept here that is missing; is that very few people have a ''plan'', or a model. No one says - hey, if company ''X'' hits this valuation - based on this; then I am a buyer..' It's all emotional hyperbole !. My examples on FLC were based on the best & brightest having a model and a plan; imho - that is what is needed to be successful here; and is obvious lacking on behalf of the individual investor... Basically if all comes down to ''planning your trades and trading your plan'' - now who the hell said that ? comments ?