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Bruce Sherman: It was a difficult year; Newspaper and Gaming Stocks

January 31, 2006 | About:

Bruce Sherman's goal is to double his clients' money in every 5 years. Historically he has achieved more than that! But 2005 was a disappointing year for him, so he is explaining more. How he assesses value in companies: " the worth of any business is determinable via a net present value analysis of the free cash flow available to its owners." Based on this principle, he avoided the Internet bubble of the late 1990s, but he also missed the recent rally of oil stocks.

Regarding to newspaper stocks, especially Knight-Ridder, he wrote, "The internet, defined for simplicity sake as Yahoo and Google, is perceived by some as a direct substitute for the newspaper. While we do not disagree that the paper component of the newspaper delivery mechanism will continue to decline in importance, we believe the bearish case neglects to consider the inherently local nature of the newspaper business. We believe that it will become increasingly apparent that the Internet, as a distribution conduit, and the local newspaper media company, as a content producer, can and will coexist profitably and symbiotically."

Source: http://www.private-cap.com/pdf/PCM%204th%20Quarter%202005%20Report.pdf

Rating: 2.7/5 (10 votes)

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