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Strategies & Market Trends : Value Investing

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To: jeffbas who wrote (9329)	12/16/1999 1:52:00 AM
From: Michael Burry	Read Replies (3) of 78516

Centex: I just took a position two days ago at 23 1/2 as it hovered near lows, 50% off highs, with big insider buying with more diversified business structure than just a homebuilder or just a manufactured home maker. Then I sold today at 22 3/4. Yep, my "new lows" rule kicking in. I wonder how low it will go. I may regret selling. But so far this year, all I know is that I haven't regretted it even once when I've followed this rule in our beloved value sector. What did I replace it with? For now, it's Crane (CR), which I bought at today's high (18 3/8). Jim likes it, and Mario Gabelli just pitched it this morning on CNBC. Great ROE and ROIC for its industry and at all-time low valuations. Its cash flow is much higher than its accounting earnings. But the last time valuations got this low the shares hit a 3 year go-nowhere patch (early 90's) in which earnings hit a rough spot. There's also a spin-off coming up. It just seems very cheap and very safe as a longer-term hold, out of which I'd expect about 17% annually after-tax if I could hold for 10 years. Mike

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