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

To: James Clarke who wrote (6410)	3/23/1999 2:09:00 AM
From: peter michaelson	Respond to of 78516

Jim: When I first got started in the buy-out business in the early 1980's small, solid companies were commonly available at 4.0x pre-tax operating income. We used to agonize over the decision to buy companies even at that level. When 4.0 became 6.0x, everyone started using operating cash flow as the denominator, instead. The rest is history. peter

To: James Clarke who wrote (6410)	3/23/1999 6:08:00 AM
From: valueminded	Respond to of 78516

Jeff: You have talked numerous times about going to all cash. Are you that fully invested now ? And when you go to cash, are you talking 100% cash or do you still retain some positions. Finally, do you include bonds as cash or do you treat them separately ? thanks

To: James Clarke who wrote (6410)	3/23/1999 7:23:00 AM
From: John Stichnoth	Respond to of 78516

So, we have til noon to keep you in the fold! One issue that's different today from 1975 is the money supply. There's an awful lot of money sitting on the sidelines. M3 today is at 6+ trillion dollars. It's been growing at a 7+ pct rate since 1975, and at better than 10% in the last year. stls.frb.org And, I believe, the Fed's numbers don't capture the money sitting in brokers' money market accounts ready to be invested. (Although indirectly and partially captured by the inclusion of repurchase agreements in M3). All of this liquidity is sitting there waiting for dips in the market, or in peoples' favorite stocks. Think about it, James, aren't you sitting there with a little more cash than you had a year ago? I certainly am. Best, JS

To: James Clarke who wrote (6410)	3/23/1999 8:24:00 AM
From: Terrapin	Read Replies (1) \| Respond to of 78516

Hi James, I (and the thread) knows what you do for a living and respect your opinions and analyses therefore it is not really my place to give unsolicited advice on this subject. So, here it goes <G>: Perhaps you should postpone such a dramatic action until the words 'scared' and 'fear' pop up less than in your latest post. Is it just that stocks are over-valued or is there a catalyst in the wings? Rising oil prices? More foreign market turmoil? Domestic earnings on the wane? Have yuppies exited the most productive portion of their lives and started to withdraw money from their retirement plans? Granted, I agree with your depiction of small-cap value stocks being ignored and under-performing. My 'non-value' holdings have far outperformed my 'value' holdings. But I am young and most pay a dividend greater than 7% so I sleep pretty well. All I am saying is that there should be a fundamental reason for a bear market (a correction might 'just happen' but I do not think a bear does - sound like a fair assumption?). Hope you do not mind the advice. Good luck with whatever you decide. John PS: I recently chose TGX over TDW after they were discussed on the thread. I passed over TDW because I doubted that OPEC could regain control with an expanded base of oil suppliers. I bought TGX ($6.75) because I had just discussed prostate cancer treatments with some medical researcher friends of mine (just out of curiousity - not necessity!) and they had spoken very highly of the seeds. That and the company's balance sheet and potential seemed like synchronicity. Short-term you can see my advice is suspect! <G>

To: James Clarke who wrote (6410)	3/23/1999 9:55:00 AM
From: Freedom Fighter	Respond to of 78516

James, I agree with your post on the small vs.large cap two tier valuation situation and historically what has happened when these big market tops finally break. What to do has been on ongoing internal debate for me too. I'd just like to add one small insight into small cap valuations. A reasonable case can be made that some if not a significant amount of the economic activity we see right now is in some part related to this mega bull market we have. As examples: Higher government tax receipts Easier pension funding Higher consumption I also question what is going to happen to the income streams and financial positions of many smaller companies that appear cheap at present when/if we have a big one. Wayne