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Market Analysis by Richard Pzena
01-29-2009, 03:13 AM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Market Analysis by Richard Pzena
Pzena Investment Management - Investment Analysis
Everyone has his own idea of valuation. Here is one, along with comments on value dispersion within the equity space.
Ha
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01-29-2009, 05:36 AM
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#2
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Moderator Emeritus
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Location: New Orleans
Posts: 47,501
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Their conclusions are:
Quote:
1. The expected return on equities at current valuation levels is higher than at any time in at least the past 28 years;
2. Valuation spreads are wide, an environment that favors the value investor;
3. We believe equity returns should surpass those of fixed income securities of equally rated issuers; and 4. Equity returns surpassed those of even junk bonds coming out of the last financial crisis in 1990.
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Makes you want to just run right out and buy value equities, doesn't it?
Well, maybe I'll just hold off on that for a while...
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01-29-2009, 05:49 AM
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#3
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Recycles dryer sheets
Join Date: May 2007
Posts: 444
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I'm Sold!!
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01-29-2009, 05:56 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Location: Texas: No Country for Old Men
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Quote:
Originally Posted by haha
...along with comments on value dispersion within the equity space.
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Ha, looks like you've been reading way too much Wall Street psychobabble. You're beginning to sound like a technical analyst.
Repeat after me: Head and Shoulders is a dandruff shampoo, not a buy/sell signal.
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Numbers is hard
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01-29-2009, 07:00 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Soooo - when are these people gonna get real tech talk wise and learn how to pornounce and spell: Norwegian or pssst Wellesley even.
Do notice I said pornounce!
heh heh heh -
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01-29-2009, 07:33 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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I hope he's right. Maybe I will come close breaking even one day. Pretty sad when your main objective in life is just to break even.
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Retired 3/31/2007@52
Investing style: Full time wuss.
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01-29-2009, 07:42 AM
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#7
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Recycles dryer sheets
Join Date: Nov 2008
Posts: 131
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Hmmm, he's not trying to sell something, is he? Never mind ...
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01-29-2009, 07:46 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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"Value dispersion within the equity space" is what happens when you combine a financial sales pitch with Star Trek, I think.
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01-29-2009, 07:55 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by ziggy29
"Value dispersion within the equity space" is what happens when you combine a financial sales pitch with Star Trek, I think.
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I'm beginning to suspect the Borg are about to launch an investment newsletter...
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Numbers is hard
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01-29-2009, 11:09 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Well clearly this thread met a real need on the board.
I should start more like this!
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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01-29-2009, 11:27 AM
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#11
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Thinks s/he gets paid by the post
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I hope the widow in your story didn't own BAC or C.
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01-29-2009, 01:09 PM
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#12
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Haha, thanks for the link. It's nice to see some hint of possible good news on the horizon, especially for those of us with holdings tilted to value stocks. I came in off the ledge to read the whole thing.
Valuations are tricky things--the true book value of a lot of these companies is far from clear, so I don't know if anyone can say what the true P/B is right now for one stock or a whole group (particularly for the financial stocks). Still--I'll take positive news wherever I can find it.
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01-29-2009, 01:28 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by samclem
Haha, thanks for the link. It's nice to see some hint of possible good news on the horizon, especially for those of us with holdings tilted to value stocks. I came in off the ledge to read the whole thing.
Valuations are tricky things--the true book value of a lot of these companies is far from clear, so I don't know if anyone can say what the true P/B is right now for one stock or a whole group (particularly for the financial stocks). Still--I'll take positive news wherever I can find it.
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My feeling is that the graph on the left is meaningless becasue of the very low current interest rates.
But the book value graph, since it is not based on absolute values but only relative values at different times, is likely to be helpful.
Also this graph shows that 2000 was also a great time for value investors, and I found that to be true. So many people piled into highflyers that there wasn't much money left for real companies.
I feel the same way now. I am agnostic about the S&P, but there are sure quality individual stocks available at good prices.
Ha
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01-29-2009, 02:12 PM
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#14
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Quote:
Originally Posted by 2B
I hope the widow in your story didn't own BAC or C.
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She owned both - but also electric, gas, water utilities, telephone, big oil, pharma, REITs, food, etc.
Other Dogs - Dow chemical, Eagle shipping, Borg Warner, Aetna insurance.
After Superbowl - may be doing some shifting - or just hurry up and wait on others.
heh heh heh - Will be interesting which sectors are still holding up say 6 mo's from now - dividend wise.
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01-29-2009, 02:35 PM
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#15
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Gone but not forgotten
Join Date: Jan 2007
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Interesting article thanks for posting ! From a women's point of view I think Liz Claiborne has ruined their brand by letting too many cheaper labels use it . Liz Claiborne used to attract slightly older well off women but now it markets to the masses which cheap looking and poorly made clothes . That brand needs a total redesign or it needs to return to it's roots .
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01-29-2009, 04:12 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Sep 2006
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Yikes of the three stocks listed 2 were down nearly 20% today Allstate and Liz Claiborne. And the third JNJ I own
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01-30-2009, 07:40 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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I heartily agree with the article -- unless it's different this time. Unfortunately I think that's a distinct possibility. But I'm still glad I rebalanced.
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Al
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