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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (1580)	6/9/1999 2:34:00 AM
From: Michael Burry	Respond to of 4691

FTR, I don't see anything in your numbers that specifically refutes mine. I don't agree with your methodology, and find the conclusions erroneous. Can't see why you doesn't use the published pro forma numbers. Instead, you use Mattel's (even those I have some issue with), and then figure out a good price for TLC. To me, this is no tiny acquisition. Mattel is now very much a combo of two big corporations, and the pro forma numbers are the appropriate ones to use. I do want to comment on " Most of equity is goodwill amortization from the Tyco acquisition, so return on tangible assets is far far higher." I would say that when all that goodwill is written off, the book value will understate true book (as it does for Coke). This business is about branding. When Tyco is acquired, it is for the brands. You can give it a fixed life and write it off, but the excess paid over book is the value of the brand, IMO. If you're arguing that Matchbox has eternal value, you can't turn around and say that its representation on the balance sheet is some sort of aberration to be ignored. SO I stand 100% completely by my analysis, which I feel to be a bit more rigorous. How's that for blunt disagreement with my bud? Mike