omagh Posted July 29, 2009 Share Posted July 29, 2009 (letter only, full report isn't posted yet) http://www.longleafpartners.com/pdfs/09q2letter.pdf We use the depressed 2009 numbers as the base for going forward rather than assuming normalized levels of cash flow from an average of the last several years. A stock’s price must be significantly discounted from what current business levels justify for us to buy. We have greater confidence in our appraisals because in addition to using conservative assumptions, some macroeconomic tailwinds could make our valuations too low. Credit remains tight, but its wider availability should help increase business activity. Stimulus spending across the world is in early stages and should show more impact going forward. Production levels dropped significantly more than GDP declined, thereby depleting inventories over the last six months. Industrial production will rise above current rates without demand growth. Link to comment Share on other sites More sharing options...
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