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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: wlheatmoon who wrote (1208)	6/5/2000 8:13:00 PM
From: John Pitera	Read Replies (2) \| Respond to of 2850

ALLC--- a bit of info from a Wally Weitz interview, he is a noted value manager who has had good returns. this is a 5-15-00 interview -----Ilana Polyak: Other value managers have suggested that since the valuations have gotten so low in some of these value stocks that the markets are primed for increased leveraged buyout activity. Is that part of your thinking behind the stocks you're buying? Wally Weitz: I wouldn't buy a company I didn't like, just because I thought somebody'd do an LBO on it. I think it's the other way around. When you think about the business value, when you're looking at a potential stock to buy and you're thinking about what the value to a business person would be, 95% of the time it's all theoretical and it just points you towards good businesses at a reasonable price and the market recognizes that, eventually, if a stock goes up. We have an investment in something called Allied Capital (ALLC:Nasdaq - news - boards), which invests in Old Economy companies and usually takes a -- they do mezzanine financing for the most part -- but they take an equity kicker, and they've started talking about deploying some of their capital towards leveraged buyouts. They're not unfriendly deals, but they're helping management take their companies private. But, I expect there will be more of that happening if these stocks stay down. I'm not looking for a crummy business, just because it may go private. Ian McDonald: One other thing that's intrigued us: We've seen on a lot of Internet message boards and hear from folks that there's kind of a gray market out there for shares of closed funds, and one that we see quite often is Weitz Hickory. What do you folks make of the fact that people are trying to get into the fund through the back door? Is it flattering? Is it annoying? David Landis: And do you allow it? Wally Weitz: Well, you can't really stop it. It happens. And some of it happens, you know, locally, here. It's a little easier for people to find each other. I mean on the surface it's flattering, I guess, that somebody wants in so badly. On the other hand, a lot of people want whatever it is they can't have. I know of specific cases where people finally find a way to get in, and find they've bought at an interim peak, and then they're disappointed a month later. So, I kind of wish it wouldn't happen. In a way, I feel a little bad that we can't be accommodative. I think it's a good fund; I don't run it, Rick Lawson runs it. I think it's a good fund, I own it myself, and I'm glad to own it. I think it will do well over time. It really wasn't a black-and-white issue to close it, but he really felt that there was a barrier to performance that comes with size, and wanted to close it when it got to $500 million and I agreed with that. Since then, it has gone up to $900 million and back down to $600 million. There was nothing magic about $500 million. I'm not sure anything's that great that you have to stand on your head to get in the back door. --------------------------------------------------------------------------------