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FOR THE RECORD: SEAN N. McDANIEL & CAPPY R. McGARRSean N. McDaniel & Cappy R. McGarr are partners at McGarr Capital Management, a Dallas hedge fund. The $200 million fund specializes in taking large positions in mid- to large-cap equity securities. ON LOOKING FOR SAFE HAVEN STOCKS: ''You've got to examine a company's valuation relative to its growth prospects more closely in a volatile market environment. Even more important is managements' track record of delivering on its promises, because that's all you can count on when markets start to turn downward.'' ON WHY CASH FLOW IS IMPORTANT: ''Cash flow is extremely important in bad times. If a company can generate enough cash to finance its own growth internally, it will have a big advantage over competitors in any credit crunch.'' ON VALUATIONS: ''Some defensive stocks, like drugs, typically sell at premiums to the market, due to their reliable earnings growth. You still can find cheap defensive stocks. But because defensive stocks typically outperform in volatile makets, it is important to get in early. Still, there are bargains out there if you look hard.''
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Updated Dec. 17, 1998 by bwwebmaster
Copyright 1998, Bloomberg L.P.
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