Would You Buy This Stock?

[David Sklansky]

This is a true story but I am leaving out some details for various reasons.

I bumped into somebody (I'm not saying when) who I hadn't seen in over a year. A very successful businessman, multi millionare, and extemely good amateur poker player. Over 50. We were very friendly acquaintances over the years.

I asked him how he was doing, and what he was doing nowadays, and he said he was seriously getting into the stock market, among other things, and it was working out for him. We continued to chat for a while and I told him that I expected to see him again soon at the WSOP and that it was about time he won it. We shook hands and parted.

After taking about twenty steps, he turned around and called to me. I walked back to him and he said something like " I would buy XYZ".

Keep in mind this wasn't an off the cuff recommendation. It was more like he mulled it over. Like he was feeling guilty for letting the conversation end without telling me about it.

Assuming the stock was $10 the day he told me about it, what's its EV two years later?

[The Dude]

I really don't have any idea how to estimate its EV with only the info given (perhaps if I were more involved in the stock market I could make an estimate), but I would definitely buy. Yeah, sure, I'd do some research on it to figure out how much I'd be willing to risk, but I would almost certainly buy.

[myxomatosized]

it was martha stewart wasn't it?

[NhlNut]

Does the businessman have any relationship to the company in question?

[SteakMeIWin]

Mail me the stock trading sym and I'll research and give my advice. I suck at Poker but am OK with stocks

[Gadfly]

Of course it’s an automatic buy.

He didn’t get to be a multimillionaire by making bad stock picks or giving bad advice to people he respects and likes.

It’s EV in two years doesn’t matter much because, barring a recession, it’s almost sure
to beat the both the market and the short term interest rate.

[Poofler]

[ QUOTE ]
Assuming the stock was $10 the day he told me about it, what's its EV two years later?

[/ QUOTE ]

You've got no way to even attempt to quantify value or time horizon. If I had to guess, I'd say he knows about some non-public future event. An honest valuation of a stock probably wouldn't manifest as a '"hey, you should buy X" and then walk away' kind of situation. I'd guess he knows about a) an important product development or b) an acquisition. "What's the EV in two years" probably isn't as relevant as "what's the potential gain when this info becomes public" if it is in fact insider information.

[Thremp]

Dumb question.

[David Steele]

Come on! tell us the stock!

I sold all my IMMR at the early peak price
+30% and need something to move into.

D.

[KUJustin]

Jail?