21 November 2006

Raymond James - Investment Strategy by Jeffrey Saut

Raymond James - Investment Strategy by Jeffrey Saut: "“’My solution to the current market,’ the Great Winfield said. ‘Kids. This is a kids’ market. This is Billy the Kid, Johnny the Kid, and Sheldon the Kid.’
‘Aren’t they cute?’ the Great Winfield asked. ‘Aren’t they fuzzy? Look at them, like teddy bears. It’s their market. I have taken them on for the duration.’
‘I give them a little stake, they find the stocks, and we split the profits,’ he said. ‘Billy the Kid here started with five thousand dollars and has run it up over half a million in the last six months.’ ‘Wow!’ I said. I asked Billy the Kid how he did it.
‘Computer leasing stocks, sir!’ he said, like a cadet being quizzed by an upper classman. ‘The need for computers is practically infinite,’ said Billy the Kid. ‘Leasing has proved the only way to sell them, and computer companies themselves do not have the capital. Therefore, earnings will be up a hundred percent this year, will double next year, and will double again the year after. The surface has barely been scratched. The rise has scarcely begun.’
‘Look at the skepticism on the face of this dirty old man,’ said the Great Winfield, pointing at me. ‘Look at him, framing questions about depreciation, about how fast these computers are written off. I know what he’s going to ask. He’s going to ask what makes a finance company worth fifty times earnings. Right?’ ‘Right,’ I admitted."

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