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Strategies & Market Trends : Value Investing
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To: Michael Burry who wrote (6133)2/27/1999 3:25:00 AM
From: James Clarke  Read Replies (1) of 78476
 
JMED sounds very interesting in your writeup. As you know, I tend toward the "widget" companies. Pharmaceuticals is, as Buffett might say, well within my circle of incompetence. But I know you have much better info on this kind of business.

I sense we've got an accounting issue here. I have done my basic 10 minute drill that I do on any attractive sounding company that somebody I respect tells me to look at, but I just cannot for the life of me ground the basis for your argument - that this company earns 30%+ on equity. What am I missing in the accounting? Is it goodwill? Are you backing that out?

That said, this sounds like a business that should be a home run. Take products that Merck has done the research on and decided is not worth their time...but it is worth the time for an $800 million company. "Niche" is one of my favorite words, and it sounds like that is the basis for JMED's strategy.

Also fill us in on what happened in late 1995. It looks like the stock went up 10 times in a year, and hasn't done anything since. This is one of the most bizarre charts I've seen in a while.

And...sheepishly I admit...I did not sell anything today. After my diatribe late last night I took a look at my portfolio and agreed with what Paul said. I bought stocks, not the market. If they go down they go down. But I own businesses that are worth more than what they are trading at now and I don't need the cash any time soon. I still think the market is in for some major pain in the next three months though, and one of these times its not going to bounce back. (Think about it. The GDP grew at 6% in the last quarter. If the market tanks next week, the Fed is not going to lower interest rates this time. I think Greenspan is kicking himself that he got bamboozled in October.)

JJC
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