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

To: Michael Burry who wrote (2546)	6/17/2000 11:33:00 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 4690

Mike, I didn't see your screen on Liqui-Box, but if I did, I certainly would have valued your opinion and taken a look. We found this one independently. (great minds? bg) I found it scanning the Extended Version of Value Line I received during that week. The thing that perked my interest further was that a Yahoo poster I admire (investin2329) is a shareholder. We both own Velcro Industries (VELCF) and have been discussing it for months. Just about everything about LIQB meets my standards for investment so I took a small position. The one thing I don't understand is how they manage to earn that high return on capital in that business. That doesn't mean they don't have some advantage. I just haven't found it yet. If Capitol Transamerica (CATA) is one of the small insurance firms that came up on your screen I would be happy to discuss it with you. I own a position since year end. I'm in at an average price of a shade over 10 and have added to the position as I learned more. There is also a very sharp insurance guy on that Yahoo thread. (insguythen) He's an agent for the company and I believe has a large interest. He knows their business very well. Wayne

To: Michael Burry who wrote (2546)	7/6/2000 9:32:23 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 4690

Mike, A competitor of Liquibox announced that the rapid rise in plastic resin prices was impacting its earnings for the quarter. My guess is that LIQB is having the same problem. Usually there's a several month adjustment period before the increases are passed along (according to someone more familiar with the company). Wayne

To: Michael Burry who wrote (2546)	7/20/2000 10:53:33 AM
From: Freedom Fighter	Respond to of 4690

Mike, "There is danger in high returns on equity in companies that are not large enough to have big moats around them. Last year's screen reflects that." Your comments from your latest screen. I think you made that point to me one other time. I am coming around to your view. Fortunately, the education period hasn't cost me any money. I used to consider a high ROE as a major "value positive" unless there was a cyclical explanation. I'm much more skeptical now and require that I "really understand" the reason for the high return on capital and why it can be sustained before I accept it. A high ROE can actually be a risk factor. Wayne