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

To: Archie Meeties who wrote (9367)	12/19/1999 11:19:00 PM
From: LauA	Read Replies (1) \| Respond to of 79000

Archimedes, thank you for defining the January Effect. I guess I've been doing it wrong all these years. Does it still jump in January? Lau

To: Archie Meeties who wrote (9367)	12/19/1999 11:28:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 79000

IMO, it is liquidity rather than market cap that determines the potential size of the January effect in a given set of shares. BRK has unique characteristics that decrease liquidity. Mike

To: Archie Meeties who wrote (9367)	12/20/1999 12:01:00 AM
From: James Clarke	Respond to of 79000

<<<I like the point made on the Buffetology thread the other day, I think by Wayne, that here we have a stock whose intrinsic value arguably INCREASES if the market tanks.> You mean Buffett is shorting the NASDAQ? If he's not, could you please explain the above idea in a way my wee little pumpkin brain can understand. TIA.>> I should have gone further - sorry. BRK is holding over $25 billion in cash and bonds, and to my knowledge, Buffett is just sitting on that warchest waiting for an opportunity. For now that is cash, worth a dollar per dollar. If the market drops say 40% (that would be a nice start), $25 billion in Buffett's hands is worth a lot more than $25 billion. Why? Because the guy has shown over and over again that he is able to mint money when there is panic selling. That is what he does best. I think what he prays for before he goes to sleep every night is for another 1974, 1987 or 1932. And we've already got the prerequisite in place - a market overvalued by 50% or more. A mania on this scale is unprecedented in my reading of history, at least in the last century. The times it got close to where we are now were just before two of those three dates (1987 was nothing compared to the other two). Buffett was virtually out of the market in 1973 and 1987. And he is now as well. He's been right on his market calls two out of three times (and he's only made those three), and my best guess is that it will soon be three out of three. Maybe he is shorting stocks, though I don't think he'd do that - he has never been known to do that with large amounts of capital.