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

To: Daniel Chisholm who wrote (7325)	5/26/1999 9:52:00 AM
From: Mike 2.0	Read Replies (2) \| Respond to of 78618

OTOH, capital intensive businesses also have high barriers to entry. For example latest Worth named Florida Rock (sorry don't have symbol) as one of 7 great value stocks. Builders go to the nearest source of concrete, etc., and Florida Rock is expected to continue to ride a wave of new development in state of Fla. I have done no research besides reading the article but may look further. And one other thought...I suspect mfrs of aggregates have mostly fixed costs (aside from fluctuations in raw materials), versus construction companies which for example, I suspect often have to eat project budget overruns , suffer penalties for missing benchmark deadlines and such, depending on contract.

To: Daniel Chisholm who wrote (7325)	5/26/1999 3:21:00 PM
From: Bob Rudd	Read Replies (2) \| Respond to of 78618

Dan: Understanding competitive issues can be critical to making an investment judgement. The best source to learn more about it is Michael Porter's "Competitive Strategy" In it he lists 5 categories of forces that erode profitability in an industry: Entry barriers or lack there of [Boeing has em, Web merchants generally don't] Supplier power [Buying from Microsoft] Customer power [Selling to Walmart] Substitute products/services [Aluminum for steel, Online broker for full service] Industry Rivalry- many factors contribute to this including high exit barriers Each of these categories has many factors that influence the degree to which industry profitability is enhanced or eroded. bob