Q: What about General Electric, which you lightened in April after the company missed earnings badly? Cohen: We are upset about the stock price, and we probably should have been more alert. We thought about the impact of the financial division on the entire company. But the indications from them were that they were managing through this. It is a non-transparent portfolio, so how do you know? I guess our judgment was erroneous in thinking that they could be different from others in managing their way through this. And I don't think anybody really knows how difficult their financial portfolio is. It was our first- or second-biggest position. When the earnings came out in April -- we don't usually do what we did then -- we sold some of the stock. But we still think 75% of GE is really good.

Q: How are you approaching technology stocks? Cohen: We love technology stocks, but they have to be regarded as cyclical stories, for the most part. Even though technology is a long-term, secular story, these stocks seem to have a strong cyclical component. But we've had good success recently with Cisco [CSCO], IBM and Qualcomm [QCOM].

Q: How are you approaching technology stocks? Cohen: We love technology stocks, but they have to be regarded as cyclical stories, for the most part. Even though technology is a long-term, secular story, these stocks seem to have a strong cyclical component. But we've had good success recently with Cisco [CSCO], IBM and Qualcomm [QCOM].

Q: How are you approaching technology stocks? Cohen: We love technology stocks, but they have to be regarded as cyclical stories, for the most part. Even though technology is a long-term, secular story, these stocks seem to have a strong cyclical component. But we've had good success recently with Cisco [CSCO], IBM and Qualcomm [QCOM].

Q: If you could have one stock selection back from the last year, which one would it be? Cohen: Freddie Mac [FRE], which we bought in November, thinking that the worst of the housing situation that was over. We thought Freddie Mac would be part of the solution, not part of the problem, and we just underestimated how severe their write-downs would be. We still own a relatively small position.

Q: What do you like about Travelers, whose shares have been under pressure? Cohen: Travelers trades at about 1.1 times book value. They have what we consider to be the best management in the property-and-casualty insurance business. They have a pristine balance sheet and, unlike many other financial firms, they have not been dinged by any exposure to subprime mortgages. And their chief executive, Jay Fishman, understands how to price risk. First of all, he won't take outsize risks, relative to what kind of premiums they are getting. And, No. 2, they won't cut prices dramatically just to capture more market share. In a better market environment the stock trades at 1.5 times book. And Travelers is increasing its book value every year.

Q: How do you go about valuing this company? Glasser: We look at it on a net asset basis, using various commodity prices. We try to make conservative judgments about the reserves they have and the reserves they are likely to have and what the final development costs are going to be. It also depends on your assumptions in terms of natural gas. If you were using an $11.50 per Mcf [thousand cubic feet] gas price, the upside price potential over a multi-year period is double its current price of about 67. If you put a $7 per Mcf price on natural gas, there's modest downside. Currently, natural gas is at about $13 per Mcf.

Q: Let's move on to PPG, Kraft, DuPont and Kimberly-Clark. Where's the upside? Cohen: They all have good or improving management teams, and they all have growing dividends. Kraft has just become an independent company, and it's already raised its dividend. Kimberly-Clark has a long history of dividend increases. PPG has raised its dividend every year for 35 or 36 years. DuPont just raised its dividend for the first time in a number of years. On the other hand, these companies have a lot of businesses that are sensitive to commodity prices. They are all fighting headwinds with raw material prices, energy costs, and transportation costs. But we think they are managing their way through these issues pretty effectively.