[DesertCat]

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BTW, Wall Street has coined a term for this type of "value" investing.

Catching a falling knife.

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We've had enough exchanges that you should know that I specialize in catching falling knifes. It's how I make my living and it's treated me very, very well. I understand why wall streeters who don't understand how to estimate value, or cannot commit to value investing, grow cold when their "picks" drop in price, and assume they made a mistake or that someone else knows something they don't and rush to sell.


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DC,

i actually followed some of your more well discussed picks here. i'd like to submit a falling knife for your opinion.

IGT. the company is heavy with cash (19% ROE for 3 years in a row and a great balance sheet), buying back stock (smart as the price is falling), well-positioned for global growth in several old and new gaming technologies (server-based gaming), pretty easily beats rather gloom estimates with its high profitability (13 ROA), but is continually falling because analysts think it's overvalued compared to the industry.

this is puzzling because its P/E is 25 to the Gaming Industry average of 45. at the same time, its P/Book and P/Sales is twice as high as industry avg. but even that reason is suspect, since IGT is much bigger than the rest of its competitors put together.

there are a few suspect activities. all of insider actions in the past 6 months have been sells. the short position is low at 2.4%, and this is a positive, but it's not like it will triple via a squeeze or anything.

anyways, speaking of falling knives, i thought i'd ask you.

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Buried. Sorry. I'm devoting my time to reading securitization prospectuses right now.