Value Library
The following is special market
commentary in light of the tragic events of September 11, 2001
In light of the Tuesday September 11 terrorist
acts in the U.S. we believe investors should keep cool, stick to their
style and stay with solid investment basics.
We believe that, historically, sudden
catastrophic, high impact economic or political events often lead to
severe securities market knee-jerk reactions. These moves, however, are
often reversed over time; the key is investment discipline.
Unfortunately, to be disciplined is easier said than done. Regardless,
tremendous buying opportunities frequently result. We believe the
current situation is leading toward the "buying opportunity of the
decade."
As value managers we are presently reviewing the
macro-economic and investment implications of the September 11 events.
They will undoubtedly exacerbate the world-wide economic deceleration
which was already in progress prior to Tuesday. Specifically we have
produced a list of 15-20 fundamentally attractive common stocks which we
are tracking for potential purchase.
We are tending toward old economy "bread and
butter" companies with low P/E and cash flow multiples with solid
balance sheets. They may be small or large capitalization. We are also
looking for fundamentally-undervalued companies which may be attractive
as merger, reorganization or takeover candidates.
In light of the present market uncertainty we
continue to carry a 20% cash reserve. We will utilize these funds for
opportunistic security purchases whenever we believe the time is
propitious.
All of us at ABC Funds are deeply saddened by the
tragedy in New York. Our thoughts and prayers are with all the victims
and their families.
Irwin A. Michael, CFA
| 
