Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: Kevin Podsiadlik who wrote (37126)	5/26/1999 1:17:00 PM
From: David Penfield	Read Replies (1) of 122087

Kevin - Warren Buffet investing in SRCM!! What a joke. Next we'll be hearing that he has bought CYOE as well!! SRCM doesn't satisfy his acquisition criteria (page 21 of BRK annual report at berkshirehathaway.com. In fact, SRCM has the exact opposite traits than some of these acquisition criteria: 1) SRCM is not a large purchase (over $50 million in before-tax earnings). 2) No demonstrated consistent earning power. Remember that future projections and turnarounds are of no interest to BRK. SRCM's story is built on future projections. 3) SRCM doesn't earn good returns on equity while employing little or not debt. As a matter of fact they don't earn anything while employing large amounts of debt. 4) SRCM is not a simple business. Warren has repeatedly said that he is not interested in technology that he doesn't understand. Also, 105,282 shares is at most a couple of million dollars. Mr. Buffett doesn't fool around with millions of dollars. He uses billions of dollars. If he was interested in SRCM he would just buy the whole company. David

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