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Corrections Corporation of America Message Board

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  • wile_e99 wile_e99 Mar 24, 1999 2:51 PM Flag

    What do you get for $8/share these days?

    The following is a quote from Peter Lynch's book,
    "Learning to
    Earn."

    ============================================================
    If you are going to invest in a stock, you have to
    know the story. This is where investors get themselves
    into trouble. They buy a stock without knowing the
    story, and they track the stock price, because that�s
    the only detail they understand. When the price goes
    up, they think the company is in great shape, but
    when the price stalls or goes down, they get bored or
    they lose faith, so they sell their
    shares.

    Confusing the price with the story is the biggest mistake
    an investor can make. It causes people to bail out
    of stocks during crashes and corrections, when the
    prices are at their lowest, which they think means that
    the companies they own must be in lousy shape. It
    causes them to miss the chance to buy shares when the
    price is low, but the company is in terrific
    shape.

    ===========================================================

    Perhaps the story here is not clear enough. I have been
    interested in PZN for some time, and have watched as the
    price has sunk down (today, below 17 for a while). I am
    confused by the prospective dividend, apparently divided
    between for-sure and we-may-pull-it-back. Could someone
    explain this?

    What will happen to PZN if interest
    rates go up (which I am sure they will over the next
    few years)? Does this impact debt already in place?
    What about availability of funds, should credit
    tighten? Can PZN stop building and live on its current
    income? Or does it have to keep building to
    survive?

    The REIT structure is not popular right now, as I
    understand it, partially because rents are not as secure as
    they were. PZN's rents are assured. The prison
    population is at an all-time high, and will keep on growing.
    Crime is down in this country for the simple reason
    that prison terms are getting longer. Keep the
    bastards off the streets, and insurance rates go down,
    people are safer, and life is better. So if PZN's rents
    are secure, why the drop?

    Wile E.

 
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