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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (1461)	3/14/1999 9:33:00 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 1722

Warren Buffett Shareholder Letter As an investor, I always try to look past GAAP "reported" and "operating" earnings and get as close as possible to the economic reality and business value as I possibly can. In the last few years I've been very upset on numerous occasions about some of the accounting games I've seen first hand or read about through some astute investor's article, newsletter etc... I've gotten doubly upset when some otherwise thoughtful and bright "Wall St. analysts" who should know better have tried to defend some valuations with what can best be described as disingenuous interpretations of reality. It's nice to see WB coming public on some of these issues. We can only benefit from his 2 cents. Wayne Crimi Value Investor Workshop members.aol.com

To: Freedom Fighter who wrote (1461)	3/14/1999 9:56:00 PM
From: Freedom Fighter	Respond to of 1722

Just to clarify, >>For myself, if I can get a high than usual return on capital from direct investment and stocks continue to get discounted at much lower rates of return than in the past, I will become an active investor.<< As a general principal (from intuition) why should I own stocks in U.S. companies that will give me a 6%-8% long term return on my investment when I can open businesses myself and get a higher return on that capital. It is that realization that I think will eventually cause the "real" ROE from direct investment to fall (which it now is anyway) or the "real" passive stock discount rate to rise (lower stick prices) to a more normal relationship. Viewed at the aggregate level, relationships that for 125 years would have made sense to me do not make sense to me right now. I think active business ownership is something to think about in this environment if a good opportunity presents itself. Wayne