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

To: James Clarke who wrote (6405)	3/22/1999 11:49:00 PM
From: Walter in HK	Read Replies (1) \| Respond to of 78507

Be careful, fellows (OT, on a lighter side 8-) I almost jumped on the Momentum bandwagon with LZRC, LCAV, LVCI of laser eye correction Centers . Had a 16 banger on VISX, since 1995. They make the machines, 75 % market share. Here is what would happen (if we are not careful) , one for the smiles. My son, in silicon valley is a chartist and I am a Benjamin Graham pupil (but almost persuaded to jump on the Momentum wagon) My late wife's father is a chartist, who bought stock before the '29 crash, would you believe. He got out of stocks last summer ! Bonds. He is 94 and thinks doomsday will come New Year's of 2000. Anyway, when I consulted with my son, on this new Momentum venture, this is how he started his reply >>Tongue in cheek:..... Herey Herey --- now mark the end of the great bull market of the last century.... Walter Linde has cast aside the motto of 'buy the house for the price of the furniture inside' and is willing to jump in to Momentum Investing.... And so it was written that the Great Collapse began on March 20 1999 8-) Other telltale signs of the market coming unglued included Warren Buffett dumping all of his Coca Cola, Gillette, and Washington Post shares and trading them in to buy shares in the Net's hotest 'virtual mutual fund' CMG Inc. In a related story, William C Guest III decided that gold will never resume a price curve with an upward tendency and and decided to invest (in his retiring years) in Pork Belly futures. Yes --- the 8 year bull market came to a quick and ugly ending when these three aligned in a curious shift in their general belief about how the universe worked..... as I write this the light bulbs in the house begin to flicker with an uneven source of power as the world prepares to be plunged in to total darkeness and the end of the world, as predicted by William C Guest comes to an early ending.... (turns out that new records showed that Jesus was actually born in March - not in December as widely believed - and therefore 2000 actually begins right now)...... kidding aside.... 8-).... here's my read on the charts: << and he goes into his views of LVCI and all. I answered: >Great Prose, Carl ! Enjoying the beginning of your answer because >I just reflected on that phenomenon over Lunch: >When I start, it must be the END. Nice to have kids like that. BTW did you see where two guys in the WStJ predicted 36 000 on the Dow ? Saying P/E of 100 is not entirely unreasonable. I noticed the Dow didn't go up. Actually, their arguments are not bad. I think, the end of the Cold War is a factor. More money, more stability. There is more money than talent to administer it, though. That's why I am here.

To: James Clarke who wrote (6405)	3/23/1999 8:27:00 AM
From: Daniel Chisholm	Respond to of 78507

James, re: JRC, are you thinking that it'll be your personal Washington Post? The negative book value sure grabs the reader's attention, but quickly looking at (only!) the most recent 10-Q gives the following, assuming that they are a good company with good management, etc, etc. Market cap is $580M and they have $780M in long term debt. Most recent' quarter's EBITDA (gawd, can't believe I'm using that!) is $27M. They have a lot of goodwill on the balance sheet, so adding back the $16.8M D&A and then taking out $6.7M capital expenditures gives about $37M of some flavor of cash flow. Multiplying by 4 gives $148M of "some flavor of cash flow, before interest" - SFCF-BI. $580M + $780M = $1360M capital, which generates $148M SFCF-BI. Doesn't look so bad, it's better than 10%. Taking interest (4*$14M) out gives $92M SFCF on $580M market cap - about 6.4x. If they can prudently carry this much debt, you're getting the company for 6.4x "SFCF" (TM ;-). If not, they ought to be able to work down the debt reasonably quickly. This what you had in mind? - Daniel P.S. Sell 'em all! ;-)