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Pastimes : Let's Talk About Our Feelings!!! -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (34289)	4/11/1999 10:42:00 AM
From: jbe	Read Replies (2) \| Respond to of 108807

Chuzzlewit -- Actually, I am not THAT much of a rank amateur at investing. In my more bumptious early days at it, I actually had the temerity to launch a SI thread devoted to examining stocks with superior free cash flow. It disintegrated when nobody could agree on how to define free cash flow, and thus on which stocks to examine/compare. One gentleman in particular, I recall, was enamored of MacDonald's, which at the time actually had NEGATIVE free cash flow. His argument was that the "discounted future free cash flow" picture was rosy. But nobody, yourself included, ever gave me a coherent explanation of how to project that discounted future. And even if anybody had, with my math, withered away from years of disuse, I probably could not have done the necessary calculations anyway. My points were more radical. Actually, they weren't points, but "feelings" -- hurt feelings, mostly -- hence they qualify for posting on this thread. 1) Only the pros (who amount to -- what? 5% of the SI crowd?) really understand what they are doing. The rest of us may talk the talk, but can't really walk the walk unassisted. 2) "Good" stocks (good in terms of balance sheets, valuation ratios, etc., etc.) can turn "bad" very fast (e.g., CPQ, once the very model of a free cash flow champion). So if you don't have the time to keep watching them, forget about it, and let somebody else do it for you. (That is my anti-Motley Fool pitch.) 3) I see no evidence whatsoever that the market at present gives a hoot or a holler about all those things we are traditionally supposed to pay attention to (free cash flow, "reasonable" valuations, predictability, low debt, steady growth, increasing ROE, etc., etc.). I would suggest that so many drastic changes have occurred in the way the market operates (e.g., the rise of derivatives, of electronic investing, etc.) that "market psychology" may have changed along with it. Specifically, hardly anyone practices "buy and hold" for more than a year -- and that includes value managers. 4) Thinking about money all the time (or even some of the time) is BORING!!!! Even for you: why else would you feel the need to immerse yourself in Dickens, Beethoven, et. al., or to mourn the passing of Yehudi Menuhin? (He was a great guy, wasn't he?...in addition to being a great musician.) Joan