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

To: Tomato who wrote (8945)	11/14/1999 1:11:00 AM
From: Michael Burry	Read Replies (4) \| Respond to of 78627

Bill Miller's been long Amazon and hence pounding the table in the press (as he did for Bank One, Waste Management, McKesson - he stopped pounding as they got hacked to bits after his big buys) for a while now. He had a reputation for not hyping his positions, and now that he's made a name for himself he is clearly taking it upon himself to spread the word about the positions he takes. Now, he has a reputation for hyping his positions. Or at least in my mind. Now, for the article. First, realize that he is now actually writing the article in Barron's rather than being quoted. Christ. The SEC should almost be called in (yeah, I know, he acknowledges his big position). Second, he calls himself a value investor, when in fact he is starting a second fund that will allow him to invest in growth stocks unhindered by the value moniker. Third, he says reward is commensurate with risk. So he basically abandons value investing implicitly right there. One can just about write off the whole article. Fourth, he takes supranormal historic return as proof that stocks were undervalued, and then takes it as proof that they could have been proven undervalued before the supranormal returns took place. When even he admits he couldn't see it in Cisco. He then takes a long-winded approach to justifying playing the lottery. And he uses this to justify Amazon.com. After all, you can only lose your entire investment! He believes he'll win, but then admits there are two variables here: his opinion of AMZN's future AND his risk threshold. My opinion: Bill Miller is coming to the market rather than letting it come to him. He has elevated his risk threshold in order to continue his streak of beating the S&P 500. And he's fooled himself into thinking it's all logical. Re: Amazon.com, the real premise that many bulls have is that it can turn a huge profit in an instant if it just stopped marketing so hard. I say a) no, they wouldn't be profitable if they stopped marketing so hard - just look at the P&L and b) they need the marketing anyway when someone can just point and click somewhere else. Another point of mine: On my Explorer browser, I have this neat thing called Favorites. In Netscape, they're called Bookmarks. That my friends is the mall of the future. I'll go to the cheapest site for toys, the cheapest for electronics, the cheapest for books...and the mall will be right there programmed into my browser, not all at one site. Why AMZN is spending so voracioiusly to become the web mall when everyone can just as easily create a web mall on their browser is beyond me. Good investing, Mike