Re: Would you invest in [Leica]

["Art Sala" <artsala@earthlink.net>]

This has been an interesting post.  Consider the following:
If the current stock price is below, at, or slightly above book value, buy
it while it is still cheap and before sales in the asian markets come back.

Either Leica will turn profits later, or more likely (as I have said here
before), be acquired by a larger concern; either way, a likely good stock
play.  The Leica name and its assets are too great to just fizzle away. 
Ditto with Vitra and the "classic" (and internationally known) furniture
designs it has under license. 
It will be interesting to see how this new Leica Chairman does.  No R8
motor since
February????

Cheers,
Arturo

- ----------
>Date: Thu, 12 Aug 1999 23:50:13 -0600
>From: 4season <4season@boulder.net>
>Subject: Re: Would you invest in [Leica]?
>
>The consensus that I've gotten on the matter of whether or not to invest
>in Leica is a resounding "No!", at least not now. A reason cited a
>number of times had to do with a perception that the company's future
>growth potential seemed limited. As a shareholder, I figured I'd be in
>the odd position of wanting management to turn Leica into a cash cow,
>but as a photographer, maybe moaning over a flood of Leica-branded
>"consumer" gear. I really have to wonder how other specialized optical
>companies make it: Maybe Al Nagler and company at Televue (telescopes)
>do it for love, rather than riches? Whatever the case may be, I hope
>someday to be able to afford to invest in such ventures, simply for the
>satisfaction of seeing something done really well :-)
>
>But for now, there are things I'd like to get, like a darkroom with a
>roof and a few rooms around it. And radiant floor heating: Spending most
>of February with cold feet is no fun! I'll see about growing a bit of
>money with the help of the Legg Mason Value Trust and Berkshire
>Hathaway, and maybe putting just a modest amount of money into something
>more speculative, like Red Hat Software or VA Linux Systems. But
>overall, I'm not looking to invest in tech stocks, except maybe through
>a good mutual fund: 5 years is an eternity in the computer industry, yet
>that that has been about the interval that I hang onto funds, and I have
>no great urge to be nervously watching over my portfolio, when I should
>be out photographing, or watching meteor showers and eclipses!
>
>Jeff
>
>------------------------------
Comment :
As an individual investing in Leica is risky but, if you are risk adverse,
buy T-bonds. 
The future profits depend on the future of Leica Camera and the future of
Leica Camera depends on the ability to innovate in new products.
If we study the past, since 1988, we see that Leica Camera has 2 strong
positions : M system with new lenses and binoculars.
The 2 weak positions are : R-system and, now, digital products  where Leica
has never been able to innovate (the S1 is not an innovation).
The R8 camera is a "flop", a commercial disaster in France (300 sold in
1997-98, according to a french Leica rep, on a population of 9,000
"prospects"= stock of individuals who have bought at least one time a Leica
product  ).As Leica is a small company, such an error (no AF, no embodied
motor, foolish price) could kill it.In France the "mise ŕ mort"(putting in
death ?) of the R8 has been done recently by Chasseur d'images (700,000
readers) : the R8 is included (with the mini3 and the minilux zoom) in a
list of "50 products to avoid".
The new chairman has been chosen because in the past he has rescued Vitra,
a
furniture company.When his strategic planning was announced in 2/99, the
price of the share grew from 6 to 14.40 DEM in april. The market has fired
a
royal salute !If we observe the chart, we see an upward trend with 3
troughs. So there were shareholders who earned money by speculating.
Now the market is waiting for results and the trend is slightly downward
with some peaks(if we believe in Elliott waves, it's time to buy...).
I imagine that the new chairman has said to the R&D dpt : "you guys are
going to have to buck your ideas up". But if the dpt is exhausted because
they think, between 2 siestas, that Oskar Barnack is still  alive, the
market will be cruel with Leica.
My opinion is the same as André-Jean Quintal's (see his post).
I strongly believe in Leica camera. Even the R8 is not a desesperate case.
See the Canon EOS 1 :in the first years the sales were not wonderful among
pros, according to Chasseur d'images.When new "L" lenses appeared, they
boosted the sales of the cameras.If Leica launches AF lenses and a R9, in
co-operation with Minolta, they'll be out off the woods.

Dominique Pellissier