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URL:  http://boards.fool.com/its-true-that-the-ben-graham-criteria-will-not-21731306.aspx

Subject:  Re: Selecting stocks the Ben Graham way Date:  12/9/2004  9:07 PM
Author:  PaulEngr Number:  34815 of 46811

It's true that the Ben Graham criteria will not select tech companies. So what?

Actually, I hate tech companies. I don't even try to analyze them. They bob in the winds on nothing at all that makes any kind of business sense. And that's coming from a guy that used to work on computers with a soldering iron!

I'm more interested in a different angle with regards to book value (and good will for that matter).

What interests me is the companies where the issue of "the whole is worth more than the sum of the parts" or it's converse is true. Those that have the converse case are often ripe for takeover attempts...the old leveraged buyout: buy the company, sell off the parts that are wealth consuming instead of creating, and then sell off the rest for a profit.

The "normal cases" (sum of the whole is worth more than the parts) is interesting in that I can often identify companies that are much stronger financially from a value perspective than from a ratio analysis perspective, which often causes them to have artificially low prices (and profit making opportunities).

So I'm looking for exceptions to the book value rule on a regular basis, but I steer clear of tech stocks entirely. Unless you can call material science companies "tech stocks".

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