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

To: James Clarke who wrote (8385)	9/25/1999 12:04:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 78958

Jim, I thought of you this week as I looked at the stocks on my some-25 watch lists, and noted that of the hundreds of stocks, the net stocks are doing quite well. I had thought you covered. Ouch. For the last week I've been carrying "The Art of Short Selling" around with me just about everywhere. Every time I get a break, I just open to a chapter. Doesn't matter if I've already read it. I just read it again. If there's one thing that keeps hitting me in the head about that book and its cases is that there's a lot of time to short and still come out ahead. The problem with net stocks is that they appear as if they require constant capital infusions, which makes them good shorts. But they're getting these infusions at will. That makes now now a good time. When the capital spicket is turned off, the stocks will react downward, but won't fully account for how bad the news is then. They'll be terminally wounded but the price won't reflect it. That's when IMO you'll be able to grab a lot of the net stocks on their way to zero. But before that, a lot of smaller companies will pitch themselves to larger companies. So the wild card is that they get taken over by a bigger, stupider, more capital-rich, company, a la Yahoo of GeoCities, which stands out as the single most characteristic action of this era. The AofSS describes this risk as the thing that keeps ss's sweaty-palmed and awake at night. I think for good reason. For my next, more certain short, I'm taking a long, measured look at Pre-Paid Legal (PPL). I posted why over on that thread. I think I finally understand that one. Mike

To: James Clarke who wrote (8385)	9/25/1999 6:20:00 PM
From: sjemmeri	Respond to of 78958

Obviously, 'everyone' is an exageration and maybe it's just where I hang out on SI but I hit a lot of different threads - not just value and bearish-themed ones. I read a lot of internet stock related threads also. And a lot of people talk about raising cash, buying puts, selling calls, etc. So I agree with you that it should have happened already but it hasn't. My best guess on what will happen now is that October will surprise people by being a non-event. Then the indices get a mild bounce before the market screws everyone by collapsing toward the end of the year when everyone feels safe and ready for the Christmas rally. Or maybe we're staring at Black Monday in 2 days. Either wayI'm around 2/3 in cash, 1/6 in S&P500 (only fund in fed retirement program), and the rest in PZN (huge div), PROG (just bought), DH (for my wife), QCOM and MU puts, and a few internet IPO stocks that I flip as quick as I can.