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

To: James Clarke who wrote (8209)	9/11/1999 2:22:00 AM
From: jeffbas	Read Replies (1) \| Respond to of 78814

Jim, I'll pray for you. I know myself that the hit in the gut feeling is always a contrarian indicator. The only one better is the "I don't care, I have to get out, I just can't take it any more" signal, which unfortunately took me out of (instead of into) some stock at the bottom last Fall. However, on longs sound companies don't go to zero on market corrections. On shorts, not only is the sky the limit, but demand is almost unknowable and there are no general market action reference points.

To: James Clarke who wrote (8209)	9/11/1999 11:15:00 AM
From: Michael Burry	Read Replies (3) \| Respond to of 78814

Jim, my number one priority right now is to read the "Art of Short Selling" by Staley one more time. I am not short anything right now, but ache to do so, if I can do it right. Just two pitches for my way of doing things (feel free to ignore and move on): Having a fairly diversified long portfolio worked wonders for me yesterday (and kept me from doing anything rash ;)) I was down a minimal 0.35%. But I had been up so much the previous two days in relation to the indices that I was surprised to see that despite HealthSouth I outperformed the indices ('cept the Nasdaq of course) over the last three days. My pitch for diversification to 15-20 value stocks: something will be moving up for you on average. Over the last few mos I've had to deal with Fair Isaac's 44 to 26 fall and HealthSouth. Because of those two stocks, I'm not up much since the end of June, but I am at least up. Also, I think HealthSouth points up a big difference between a value investor who uses technical analysis to help find bottoms, and a contrarian investor who just uses technical analysis. I have a rule that I sell when a new low is hit. But I also have a rule to either add more or sell the position when I'm off 33% since initiation. No waffling. When a stock trickles to a new low, despite the fundamentals I'm going to exit. The reason being it can turn into a New Holland, Deswell, Fruit of the Loom or Champion, and a screaming bottom might be in the works later. But when a stock falls 40% through its old lows in one day on 35X average volume with 8 broker downgrades, a technician would be paralyzed and sell. A value investor would find it an opportune place to buy if the original fundamental story is intact. This is just my pitch for how a minimal degree of technical analysis doesn't hurt and can help. Pepsi is a losing position for me now because I called it a Buffett stock and hence justified buying "for the long-term" and didn't wait for the stock to fall to its trading range lows (12.5% lower). BTW, technically Pepsi is now in no-man's land,and I wouldn't buy again unless it gets to the high 20's. Just rambling, Mike