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Strategies & Market Trends : Value Investing

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To: Axel Gunderson who wrote (4752)	8/22/1998 2:36:00 AM
From: Michael Burry	Read Replies (1) of 78596

Axel, re: time frames, value investing is not synonymous with long term investing, and it is not incompatible with tax-loss selling and other maneuvers, IMO. Value in the Graham sense means buying undervalued and awaiting fair value. If you get to fair value in a few months, then take it - holding on longer only further enhances the return-depressing realization of value problem that your other stocks will experience. So in fact long term holding is the opposite of what we would like as buyers of undervalued shares. Value in the Buffett sense - which is what it sounds like you have done - is buying and holding, which depends on a particular art that he has perfected above everyone else and involves growth investing. The Graham method is much more accessible to most of us, and just by its nature, long holding periods for mediocre or cyclical businesses - the only true Graham values available the last few years - are counterproductive. So when the Graham type stocks fall 50% in a few months it really is significant. It makes a long-term investment out of something we would rather have been a short-term investment, and therefore depresses overall returns for years into the future. Mike

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