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

To: Michael Burry who wrote (9197)	12/8/1999 11:41:00 PM
From: Paul Senior	Read Replies (3) \| Respond to of 78627

Mike, re: >>what does it tell you when doctors are making excellent investors - in droves? << Price of medical care will rise as physicians decide to leave the profession and become professional investors. (-g-) It's simpler, easier, faster, and more profitable to leave medicine and its hassles to become professional investors. If I can overlay my own emotional makeup onto your physician friend, I would say if my networth were quintupling in three weeks, I would find my daily work to be an impediment to me. I'd likely be prescribing some tranqs for me too. Very odd how this all turns out. For a person like me who's worked for many years... to see such returns... so quickly achieved by using guts and perseverance... I'm both in awe and also discouraged. Discouraged because it seems to trivialize the nature of the work, save, invest cycle that I've followed for so many years. Perhaps a casino analogy might apply. If a new or inexperienced player comes up to the dice table and picks up the dice and starts shooting number after number (i.e. has win after win), I see the shooter look around the table and he sees more and more money being bet. So he bets more too. Doesn't really know what he's betting, just following the moves people around him are making, and betting more and more. And having more and more chips pile up in front of him. Telling the person about money management or the best bets on the dice table is useless. (if there were even time to talk to the person). Whatever he does, he wins. He has no fear. People are shouting and yelling and he is glazed: "What's this? Where have I been all my life. Easiest money I have ever made. I'm in heaven. It's going to last forever. I LOVE shooting dice." Starting with a small amount of money, maybe $25 dollars, the shooter takes off the table, when the roll finally ends, say $15,000 or $25,000 or more. Very excellent. But the shooter has a problem he doesn't know about. (It's not taxes -g-) It's that he will have much difficulty internalizing what his head knows. Which is, that a roll of that length (number after number) happens RARELY. For the occasional gambler himself, maybe once in a lifetime. To participate at the table when it occurs for somebody else, maybe once a decade, if that. And so, our new gambler, unless he is pretty internally balanced, he will come back to the table - "easy money, do it once, do it again" -- again and again looking to repeat that first experience. And fundamentals - conservative money management, playing the best values -- those will forever take a backseat to the person's knowledge that he was able to turn nothing into something big without all THAT stuff, and he should be able to do it again. And of course, ignoring those two variables (money management and value) now leads to rapid and excess losses. Your physician friends have two issues then. When to sell (which for right now is moot -- never sell, bet more!), and what to do with the funds when they are sold. My belief is that such rapid accumulation of money by inexperienced punters forever diminishes in their eyes, the value of patient, value investing. But if they assume that they can replicate their current performance in future years as was done in '99 either with the same methods with the same stocks, or by finding different stocks, that is a mistake imo. Some of this is my own cussing at myself for not being more gutsy and not being a huge winning player at the table (too). Which is embarrassing to me since, unlike most of you guys, I've been a player a lot longer. Some of it is the craziness of the whole casino. For now, it's impossible to argue that value counts. Alice - as in Wonderland - rules. Just my opinion, I've been wrong many, many times, and compared to your physician investor(s), it certainly looks as if I'm maintaining my record.

To: Michael Burry who wrote (9197)	12/9/1999 1:07:00 AM
From: James Clarke	Read Replies (2) \| Respond to of 78627

Mike's friend made half a million dollars in the last three weeks. You would think I would have been hearing these stories over and over and over again...not that I want to hear them. What makes me really think is that I have not been hearing these stories personally until the last couple weeks. Mike lives in Silicon Valley, so I'm sure he's heard it for a long time. But I live outside Philadelphia. (But I work for an investment firm - my bosses are all multimillionares who know people - you'd think the buzz would be going around if it were real.) I find it very interesting that I started hearing these stories with specific names (hey, I know this guy that made x on the stock XYZ and is now worth half a million dollars) just a few weeks ago. And just today I heard three more stories like that. (Some guy bought the best house in the township off internet money). Honest to God, I had never heard a specific "I know him" story until two weeks ago, and today I heard three. Is that a peak? I remain short QQQ and will double down if it goes much higher. JJC

To: Michael Burry who wrote (9197)	12/9/1999 8:55:00 AM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 78627

A very, very close friend of mine whom I work with and talk with 6 hours a day has in the last 3 weeks quintupled his net worth on a single stock. I recently received this email: Subject: Saint Corel Date: Mon, 29 Nov 1999 22:23:38 -0500 From: "xxx xxx" To: "Daniel Chisholm" Happiness is having 5000 shares of Corel at $2.96. I don't care if he goes to jail, I love him (figures in Canadian dollars). The story is this: This guy, a good friend of mine, struck up a conversation with me about stocks a year or so ago. I told him that I mostly did shorting, was really smart, making a lot of money, and the market was dangerous, dangerous, dangerous -- very overvalued, and I was terrified at how all the people I know would be hurt by what I considered to be inevitable. (See a recent post or two by me on this thread if you want an update on how smart and profitable I am now ... :-( He mentioned to me that he had bought Corel, and I told him that although I hadn't shorted it, I had it under research as a possible short for a couple of years at that point. I thought that it was run by a flake, was very unfocused, might go out of business, etc. I sure didn't want a friend to get hurt buying a stock that looked "cheap" because it was only two or three dollars per share, and a former tech highflier, that "might come back" (a triumph of hope over reason?). He understood what I was talking about, and appreciated my opinion. I got the impression that he wasn't being foolish w.r.t. the size of his position, was under no illusions, and realized that he was making an "I can afford to lose it all, and might" bet. Then on 29 Nov 99 I received the email above. And yesterday I was speaking to him, and he is still holding, despite repeated calls from his broker to sell. He's only turned $15K into $200K... ;-) Our conversation finished up with him remarking (he's a very sensible sort of guy, he's under no illusion that he's an investment genius) how amazing it was that you make so much money "doing basically dick". I told him that any time he needed more investment advice from me, be sure to call... ;-) So: "tick, tick, tick...." - Daniel