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To: Suma who wrote (21038)4/4/2005 1:19:02 PM
From: Paul Senior
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Yes, Suma. It's a statistical approach for me. I like to buy a package of these type companies (if I can find them) and hope the winners go up more than the losers fall. Only rarely do I find any of these companies to have earnings when I buy them. (Others though, perhaps Brinks for example, may have better success or screens in finding profitable ones.)

Some additional background info. for you:

In past I've tried to bring some judgment about the business or business prospects to the purchase decision - I have tried to evaluate why each of the companies seems to be so downtrodden and evaluate the prospect of a turnaround. I've been very wrong in some of my judgments. For example, I passed on SINA (a great Steve168 call!) which rose maybe 50x from where it sold below cash. I keep trying to avoid making judgments for stocks in this particular category (below cash plays), but I find it very difficult to stop myself from doing so.

Others will only buy if they have analyzed the company and prospects and believe they see opportunity or catalyst. Brinks and TPE is an example perhaps.

I've not kept good records of my performance here. I believe most of these stocks have worked out. Losses have occurred in one of three ways:
1.Company disintegrates - wiping out the investment.
2.I lose patience and sell too soon. (Patience is often required here: 2-3 years is reasonable.)
3.The gains are so small as to be insignificant - especially if the time value of money is considered. (Perhaps knowledge of the company's prospects and only picking one or a few of these companies lets an investor more confidently make bigger bets and get more profits than I do. That way is too risky or difficult for me though.)

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To: Steve168 who wrote (21027)4/4/2005 1:19:56 PM
From: Brinks
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Steve Re: TFS

It's tough to know sometimes exactly what management will do. If there was value there you would have thought that management would bale and merge long before know. I guess it goes back to no matter how big a margin of safety one may believe they have the management of the company is the key ingredient. It takes a lot of time to evaluate management. Most don't do it because of time.

What a down slope:

finance.yahoo.com

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To: Paul Senior who wrote (21037)4/4/2005 9:17:22 PM
From: Steve168
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Thanks Paul and Brinks for your reply.

The tech cycle is so dramatic - look at your AVCI from 40 down to 2 then jump to 20 in a year, now it is back to 3.8. Will it survive this time? If it can survive, then it could have another chance to go to 10 or 20.

Good luck,

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From: hoyasaxa4/4/2005 10:54:45 PM
   of 71246
 
Ramblings & A Question

Gas prices are up.
House prices are up.
Comic Book Prices are up.
I seem to be seeing a lot more penny stock pitches lately too.

OK.

So, where's the inflation? Sure seems like inflation to me.

Anyway......

Aren't rates bound to go up, house price appreciation to slow (whichever comes first)?

Not to mention the uncertainty regarding war, the stagnation of Europe, not "low" P/Es for sure and litigation hangovers and other macro threats to other industries (real estate bubble bursting, Spitzer's attack on insurance, big pharma drug withdrawls and lack of blockbuster creation)...

So, what's the positive story? A republican government (but what about spending), technology (nano? hyrbid cars? internet? cost savings?)? The US remains the best/safest place to invest (defecit?, dollar??

By the way, what's up with Berkshire Hathaway?

Anyway.....

So Paul, Spek, brinks et all here's the $64 question: If you could invest in one fund or stock for your newborn boy's future (can't be cashed for 18 years) where would you invest?

-HoyaSaxa, new father, fully invested (top holdings Berkshire, Centerpoint Energy...20 other postions including Electronic Arts, Cendant, Disney).

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From: hoyasaxa4/4/2005 10:57:45 PM
   of 71246
 
Ramblings & A Question

Gas prices are up.
House prices are up.
Comic Book Prices are up.
I seem to be seeing a lot more penny stock pitches lately too.

OK.

So, where's the inflation? Sure seems like inflation to me.

Anyway......

Aren't rates bound to go up, house price appreciation to slow (whichever comes first)?

Not to mention the uncertainty regarding war, the stagnation of Europe, not "low" P/Es for sure and litigation hangovers and other macro threats to other industries (real estate bubble bursting, Spitzer's attack on insurance, big pharma drug withdrawls and lack of blockbuster creation)...

So, what's the positive story? A republican government (but what about spending), technology (nano? hyrbid cars? internet? cost savings?)? The US remains the best/safest place to invest (defecit?, dollar??

By the way, what's up with Berkshire Hathaway?

Anyway.....

So Paul, Spek, brinks, blank, Dale, Jim et all here's the $64 question: If you could invest in one fund or stock for your newborn boy's future (can't be cashed for 18 years) where would you invest?

-HoyaSaxa, new father, fully invested (top holdings Berkshire, Centerpoint Energy...20 other postions including Electronic Arts, Cendant, Disney).

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To: Brinks who wrote (21040)4/4/2005 11:19:33 PM
From: Paul Senior
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Brinks, as regards TFS, I look at the chart and it's terrible:

finance.yahoo.com

Something's missing there though (Or maybe it's my memory that's missing -g-). TFS sold below cash + marketable securities when I bought. I bought here:

siliconinvestor.com

I was wrong when I described the cash amount. It was actually cash+marketable securities.

There was a spin-off of those "marketable securities" - a company. As I recall I sold my TFS shares and the spin-off shares I received for more than my purchase price. To my mind TFS was a below-cash play that worked out okay. Not possible for me to see that though from the Yahoo graph.

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To: hoyasaxa who wrote (21042)4/5/2005 12:02:20 AM
From: Paul Senior
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Hoyasaxa: one stock or fund for the next 18 years (i.e. a newborn's future)?

CD might be okay. (I expect to hold my CD shares maybe five or more years, and adding shares ocassionally.) I'm almost always focused on my latest ideas/research, so now, today, and subject to change, I'd pick Wrigley - good growth, and a buyer is fairly sure it won't be obsoleted and that the company will still be around in the next 20 years - generating good profits too (one hopes).

Funds? I don't follow any close enough. I'd look for a money manager. I'm not qualified to pick, but that won't stop me from presenting my ideas. I'd look for somebody sharp, somebody you might be able to trust (if there are such people), somebody young enough to be around long enough, and somebody hungry enough to care about how he/she might perform for you. I offer three names: Jim Clarke - find out what fund he's managing and check him out. He's tough, smart and disciplined (and he can pick stocks). He has a lot of admirers here. Also maybe Mike Burry (this thread's founder) who might be managing a hedge fund. Quick, aggressive, smart. He might be okay. If it were me, I'd seriously consider giving monies to Dale Baker. He's accessible, documents his stuff including errors (anybody can and will document their successes), has a good success record, likes value, searches the world for it, and maybe is flexible enough with clients to invest with a specific risk profile that would be tailored to each client.
I'd much rather have someone like Baker opportunistically pick stocks for me over the next 18 years than just trust myself to pick one or a few stocks to be bought now and put away for years and years.

DISCLAIMER: I don't know any of these guys. Heck, given this is cyberspace - maybe they're all the same guy. In any case, I have no relationship with them, I don't correspond privately with them, I can't recall the last time Clarke or Burry posted here. I, my wife, my cats, we don't socialize with them, their wives, their girlfriends, or their cats. Plus... I would like to believe I'm a better stock picker than these three... even if it's not so - lol.

ASIDE: Hoyasaxa, didn't you say in a post a few years back that you were a financial or stock analyst at one point? Perhaps you are too modest: it's your own good stock ideas now and maybe later that might be valued by your family! And don't limit your brain to stocks. Real estate - a home for example -- has been a good investment for many people over the long haul.

Hoyasaxa>>>>
CONGRATULATIONS, DAD on the birth of your son!!!!

I hope mother and son are doing well. (And that you're not in too much shock. -gg-)

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To: Paul Senior who wrote (21044)4/5/2005 12:59:59 AM
From: Brinks
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Paul

Right you are they spun off:

Three-Five Systems Completes Brillian Spinoff
Tuesday, September 16, 2003

TEMPE, Ariz., Sept. 16 -- Three-Five Systems Inc. (TFS) announced it has completed the spinoff of its subsidiary, Brillian Corp., by means of a special dividend distributed to stockholders yesterday. The Brillian common stock was expected to begin trading on Nasdaq as "BRLC" today.

TFS and Brillian will each continue to maintain corporate headquarters in the Tempe, Ariz., facility owned by TFS that also houses Brillian's high-volume microdisplay manufacturing operations. Brillian also maintains its Personal Display Systems Group in Boulder, Colo. Neither company is expected to relocate facilities or personnel or to reduce staff as a result of the spinoff.

You had to sell this one off quickly to realize max value:

finance.yahoo.com

Paul you have to be in the money on Storm Cat. I always remove cost upon a double and hold "free" shares forever. You should consider same.

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To: Brinks who wrote (21046)4/5/2005 1:27:30 AM
From: Paul Senior
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delete

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To: Brinks who wrote (21046)4/5/2005 1:27:49 AM
From: Paul Senior
   of 71246
 
Brinks: selling tactic:

regarding, "I always remove cost upon a double and hold "free" shares forever."

Yes, this can be a really good idea. Especially if & when one is in the fortunate position of having a stock move up many times original price. In one sense, you don't have to worry about what point to start to take profits, because every point is profit after you've got your cost out. Makes it easier to ride 'em up. Well, imo.

Selling 1/2 after a double just seems too pat for me though. My idea is to buy undervalued and sell only near full value or fair value. I don't want to use arbitrary sell rules to reduce my position to protect profits when the stock is still undervalued. My problem though is that I quite often misjudge what fair or full value is - I just seem to hold on too long. And so maybe I should be selling to get my cost out if my tendency is to ride 'em too long.

I'm just not consistent or logical sometimes. For example, sold 1/2 of my EGR position when it popped, but still holding all shares of TPE:

Message 20874002

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