From: leona@Happy-Man.com (Leona_Troese)
Subject: Solid Value #716 -- Irving Wolfe's Commentary of late August
Followup-To: sender
Keywords: solid value commentary wolfe
Reply-To: Leona_Troese@Happy-Man.com
Organization: Happy Man Corp., Vashon Island, WA 98070-7399
Date: Wed, 2 Sep 1992 15:48:45 GMT



Copyright 1992 Happy Man Corp., Vashon, WA 98070-7399, 1 206 463 9399
One hard copy may be made for individual, personal use only.

What follows is Irving Wolfe's column, Commentary, from the most
recent issue of _Solid Value._  

Permission to distribute it via Usenet is hereby granted.

Because Solid Value's heart is its tables of Best Buys and 
former-Buy followups, this free distribution of Irving Wolfe's 
Commentary should be interesting to some Usenet readers without 
making subscriptions less valuable to those who actually invest in 
stocks for profit.  

=====

Solid Value's stock-picking performance record, an average 29.5% 
gain for a total of 245 recommendations, versus 23.1% for the Dow 
Jones Industrials and 11.8% for the Value Line Composite over the 
same time periods, suggests that following all our recommendations 
without further research will produce good results.  We realize, 
however, that many readers would like to investigate the companies 
on their own before investing and that a table of companies' 
addresses and telephone numbers is a good starting point, so one 
appears on the back of the introductory insert we now provide 
whenever an issue, like this one, includes new Best Buys.  

Hyde Athletic Industries will receive our "Sell!" recommendation in 
this issue; its price has risen sharply in recent days to as high 
as 9 3/4, some 24% above the fair value we calculate.  Solid Value 
originally recommended Hyde's shares almost two years ago at a 
price of 4. 

Quite Contrary 

Although Solid Value often recommends the purchase of out-of-favor 
stocks, I do not consider our approach "contrarian," but, rather, 
value-based.  The "contrarian" idea is that anything popular must 
be wrong; a contrary investor buys what is out-of-favor because 
others disdain it, assuming that what is unwanted must be 
under-priced.  He might respect investors' collective ability to 
see what is favorable in a company's situation or bleak in its 
outlook, but he notes that they tend to forget about price as a 
most important variable, paying too much for the company with 
excellent prospects and selling the troubled company's shares too 
cheaply.  

Though this view makes contrary investing seem somewhat reasonable 
and less elitist, I see this philosophy as flawed in the same way 
that the "sales per share as a percentage of price" approach is.  
Both gain their plausibility from their goal of finding good value, 
yet neither actually measures value.  Attempting to reach value 
directly, as we do, seems likely to be far more fruitful than 
trying to attain it through these rather peripheral measures, which 
surely correlate with value but include much statistical noise.  If 
it were impossible to calculate values and purchase bargains, both 
methods might be useful, but such second-rate tools are 
unnecessary.  

-- 
 Leona_Troese@Happy-Man.com      Happy Man Corp. 206/463-9399 x109
 4410 SW Pt. Robinson Rd., Vashon Island, WA  98070-7399  fax x108
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