"pure play"

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Thu Sep 21 10:44:37 PDT 2000



> From carlremick at hotmail.com Thu Sep 21 10:28:25 2000
>
> it signifies that the investment opportunity you are presented
> with is a great idea because the company specializes in just one
> thing.

I don't think it implies that's it's great _beacuse_ of that, just that it appears to be a single thing. Some people like to pick investments that fit their world view: the price of oil will continue to rise, I'll buy crude oil futures. You might be tempted to also buy Exxon Mobil (NYSE:XOM), thinking they are a "pure play" and they are more pure than most, I guess; but they also do chemicals and coal, among other things. So your purchase isn't exactly a "put your money where your moth is" play.

But say you were bullish on sewing machines, thinking the worldwide pent-up demand for sewing machines must be huge. You might be tempted to buy shares in Singer (NYSE:SEW)[*] ... but they aren't a pure play at all, having diversified in the 60's ... last I checked, the majority of their revenue comes from aerospace (specifically missile guidance systems; who knew?).

[*] Nevermind that they are (barely) trading below $1 and are just about to emerge from bankruptcy.

/jordan



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