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   Strategies & Market TrendsValue Investing


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To: Carl Worth who wrote (20672)4/6/2005 6:36:20 PM
From: Paul Senior
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Carl Worth, regarding housing stock SPF: Fwiw, I'm considering upping my position a bit at this point.

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To: gcrispin who wrote (21057)4/6/2005 8:09:25 PM
From: James Perry
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gcrispin, I now have taken a close look at your choices mentioned in 2057, and agree that all have value. I will tuck a little of each into my portfolio, though in truth I believe Enpath is the one most likely to be a multi-bagger. I always buy with a long term view, but I look at my age and feel that I probably won't be able to wait for some of them.

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To: Madharry who wrote (21069)4/6/2005 10:30:04 PM
From: Paul Senior
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Madharry, I can't see those buys. (I have already admitted admitted that I don't see so well though -g-.) Just don't understand the attraction. Of those three companies, as I screen 'em, there's only one that's ever shown a profit, and that was for just one year. So what's the attraction for value players or anybody? OTOH, I certainly can see selling some CRXL. If you bought when it was mentioned here (I don't recall by whom) as a below cash play, you ought to have a 5-6 or 7 bagger with it at this point.

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To: Madharry who wrote (21069)4/6/2005 10:30:21 PM
From: Paul Senior
   of 70552
 
delete duplicate post

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To: Paul Senior who wrote (21065)4/7/2005 9:59:17 AM
From: Spekulatius
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Spekulatius, timely move by you out of BUD
True, but moving into WMT does not look too good today either. Still I think that WMT looks better than BUD at this point -i expect BUD to end up in the low 40's before long.

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To: Spekulatius who wrote (21074)4/7/2005 11:13:09 AM
From: Paul Senior
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Spekulatius, I'll take a little WMT here. But I ain't going shopping there unless I'm desperate.

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To: Madharry who wrote (21069)4/7/2005 12:08:42 PM
From: - with a K
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Ahhhh, DNDN.

My "shame pick," as Paul so rightly calls these that go against you and you don't sell. The only thing I can think of to say about it now is that it is so unloved and untrusted.

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To: - with a K who wrote (21076)4/7/2005 12:22:10 PM
From: Paul Senior
   of 70552
 
Value investors sometimes do well by selling pride and buying shame.

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To: hoyasaxa who wrote (21043)4/7/2005 7:08:47 PM
From: Brinks
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$ 100 potential for every $ 1 invested says newsletter writer Ron Struthers on my recent Scientigo or Market Central pick last week. Ron saw my summary I posted here and liked it so much he picked up the stock after talking with CEO. I did not talk with CEO.

I had no input in Struthers report on MKTE below. I call this my value play--$ 100 to $ 1 per Struthers. I purchased shares today, yesterday, last week and probably tomorrow.

My research summarized here became the basis for the newsletter coverage below:

Message 21114117

The stock has not moved at all since the newsletter came out last week.

Newsletter promo:

Imagine Buying Google at $ 2.00 !

How about a stock that a Newsletter writer feels has a potential of $ 100 for every $ 1 invested.

Read the following:

Newsletter writer Ron Struthers just came out with the report that says: "The Next Big Thing In Search Technology." And the outside counsel of GOOGLE is part of the intellectual property team at Market Central or Scientigo (MKTE). Ultimate Disruptive Search Technology…...

Struthers Newsletter REPORT March 29, 2005:

"The potential here is enormous because this company has a tiny market cap of just US$14.0 million and the market could put a value on this of $1 or $2 billion when it finds out about them. This means we have a chance to make $100 for every $1 invested, it is like being a seed investor in Google."

See Ron Struthers complete Newsletter REPORT here on Market Central:

playstocks.net

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To: Spekulatius who wrote (21059)4/7/2005 10:27:18 PM
From: Mark Marcellus
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I'm starting to look at WMT and one thing that really leaps out from their balance sheet is the negative working capital, which was negative $3 Billion as of January 31, 2004. Part of this can be attributed to their aggressive management of AP, and I'm sort of okay with that. However, Accrued Liabilities at $10 Billion and counting is also a huge piece of it, and I'm having trouble understanding the accounting. A small part of it is accrued membership fees, which is fine, but the bulk of it seems to be hedges. Here's how they describe it in the 2004 AR:

The Company entered into cross-currency interest rate swaps to hedge the foreign currency risk of certain foreign-denominated debt. These swaps are designated as cash flow hedges of foreign currency exchange risk. The agreements are contracts to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. Changes in the foreign currency spot exchange rate result in reclassification of amounts from other accumulated comprehensive income to earnings to offset transaction gains or losses on foreigndenominated debt. These instruments mature in fiscal 2007 and 2009.

The Company entered into an interest rate swap to lock in the interest rate on floating debt. Under the swap agreement, the Company pays a fixed interest rate and receives variable interest payments periodically over the life of the instrument. The notional, or contractual amount is used to measure interest to be paid or received and does not represent the exposure due to credit loss. As the specific terms and notional amounts of the derivative instruments exactly match those of the instruments being hedged, we have applied the “short-cut” method of accounting provided under FAS 133 and FAS 138. As such, the derivative instrument as assumed to be a perfect hedge and all changes in fair value of the hedges were recorded on the balance sheet in other comprehensive income

The Company expects that the amount of gain or loss existing in other accumulated comprehensive income to be reclassified into earnings within the next 12 months will not be significant.

Hedging instruments with a favorable fair value are classified as other assets and deferred charges in the Consolidated Balance Sheets Those instruments with an unfavorable fair value are classified as accrued liabilities.


I'm confused. If this is treated as a "perfect hedge" and any gains and losses are handled in comprehensive income, shouldn't this be B/S neutral? Does the last paragraph mean that if a $1 Billion hedge has a fair value of one dollar it's a $1 Billion asset, but if it has a fair value of minus one dollar it's a $1 Billion liability? If that's true, it's insane.

I've looked around and I can't find any source that even mentions the negative working capital issue. Maybe it's just me, but I'm having trouble understanding why this isn't at least worth an explanation, especially for a company whose net profit margins run around 3%.

Any thoughts on this would be greatly appreciated.

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