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Strategies & Market Trends : Value Investing

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To: cfimx who wrote (4849)	8/28/1998 8:29:00 PM
From: Michael Burry	Read Replies (3) of 78523

Oh I think off-balance sheet liabilities are real, but then there's a definition problem - is Y2K a legitimate liability for the company. If so, is it a liability for me as an investor? There's also a quantification problem. How big is the liability for a specific company? And how much will the stock price be affected? Saying emerging market stocks are way behind the curve and throwing the baby out with the bathwater doesn't make sense to me. The way I see it Telebras just got bought out by a bunch of entrepreneurial-minded businesses with foreign capital and expertise. So they are ignoring Y2K? More than likely they and the Street have already planned it into there capital budgets. If not, to what degree are they ignoring it? And if so, why - stupidity or intelligence? To what extent will this ignorance or knowledge affect the stock? Amazon has three "be afraid" books on Y2K: amazon.com I flipped through one - awfully gloom-and-doomish - I don't buy the scenario. It's the most popular "the world is coming to an end" factor discussed in the media, and everyone is talking about it. In my book, if anything it's already been discounted. Even if Y2K has significance, one has to figure that emerging markets as a whole are already discounted from the US for reasons such as Y2K. The market is already telling me I can buy the future of Brazilian telecom for 6 x earnings/2.5X cash flow or buy the future of American telecom for 20 x earnings? So certain American advantages are already implied. But then there's Americans in at Telebras too, and I don't find AT&T's earnings worth three times Telebras' earnings. Mike

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