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National Presto Industries Inc. Message Board

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  • pmlljl pmlljl Jul 11, 2003 6:45 PM Flag

    New 52 week high:

    no_slapps: You just don't get it! If Enron and Worldcom had such fine businesses, why are their shareholders getting nothing ($0) for their shares? I don't know about you, but I am investing to make money. That is, I want dividends and capital gains from my stocks as well as my principal back.

    Are you one of those new modern investors who thinks the role of the capital markets is to supply unlimited capital to smart young people so they can start crazy new businesses with no chance of success and without adult supervision?

    Secondly, where money is concerned, the bad guys never go away. The con men are always scheming to get your money any way they can. The recovery from the bubble is only about half over. Because the credit cycle eased the pressure on the weak sisters has eased. But I guarantee you that when they can no longer sell stock or borrow to keep their leaky old boats afloat, it will become apparent that there is still a lot of trouble in the financial world.

    Someday I want you to take me on a tour of your hi-tech kitchen and show me your measuring cups with embedded micro chips and your internet toaster.

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    • pmlljl, the shareholders of WCOM and Enron are getting nothing because their stock represents the "residual value" of the company after all debts are satisfied. There is no residual value to distribute. But that fact does not equate to a non-existent business. The actual revenues were far into the billions of dollars.

      Anyway, I will take a look at both companies AFTER their bankruptcies are concluded.

      If you care, most of my holdings are the stocks of small savings banks and small savings & loans.

      My kitchen is equipped with manually operated measuring cups, which are probably older than me -- which means kitchenware companies haven't gotten much from me lately. However, your comments suggests you don't think innovation kitchen gadgets is possible or likely, which is exactly why I think NPK's prospects are limited.

      • 1 Reply to no_slapps
      • no_slapps: I understand exactly why Enron and Worldcom shareholders are not getting any money back from their investments. It is because they were poor businesses run for the benefit of the management instead of the stockholders. In addition, the very top managers in these two companies were predatory crooks who cared only about themselves and cared nothing at all about their fiduciary responsibilities to their shareholders. Moreover, in Enron's case, the company just announced, in relation to coming out of bankruptcy, that their creditors are only going to get back about 20% of what they are owed. As for the size of their businesses, anyone can create a large revenue business if he is willing to sell below cost. The trick is to fool Wall Steeet into giving you the cash needed to be able to sell below cost. Losing money is easy, the hard part is to make it and keep it.

        Another way to grow a business is to make acquisitions. Worldcom appeared to be really good at this. They made acquisitions right and left. The worst problem with this is that in most cases they paid way too much. Buying businesses is very much like an investor buying stocks. That is, if you pay way too much for the hottest stocks, you are as good as dead. Thus if you had paid $200 for Amazon or say $70 for Worldcom or Enron, your later efforts could only attempt to reduce your losses because those stocks were never close to having intrinsic values in those amounts. The market is often very wrong in pricing stocks and I contend that it was really wrong pricing NPK at $26 and it is still wrong at $32.72. But it is finally going in the correct direction. Instead of carping about the company and its management when the stock was $26, you should have buying it.

        That is why I think you are so mistaken about NPK and its management. They have been running this company for about fifty years and there have been no bankruptcies. They do not go back to Wall Street with their hands out asking for more money all the time. They have continuously paid relatively large dividends that a person like yourself who invests in banks and savings and loans should understand and appreciate. Besides they have accumulated a great deal of cash that you and other shareholders would love to get your hands on. I can only conclude with your attitude about "kitchen gadgets" that you somehow ran across NPK's balance sheet and decided to buy the stock because you thought it was a bank!

        Finally, I again reiterate my offer to buy your stock at current prices so you will have cash on hand ready to dive into the NEW Worldcom and the NEW Enron who you said you believe will put up some "good numbers". And this time I hope their "good numbers" aren't just a prelude to a Chapter 22 (2x11) bankruptcy filing.

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