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

To: Craig Bartels who wrote (10899)	7/9/2000 9:54:19 PM
From: Madharry	Respond to of 78465

Stick around on this thread and you will have the opportunity to learn from lots of peoples mistakes.

To: Craig Bartels who wrote (10899)	7/9/2000 10:54:47 PM
From: Wallace Rivers	Read Replies (1) \| Respond to of 78465

Craig: Glad to have you here, please feel free to speak your mind. Although I only short on the rarest of occasions (although I write covered calls relatively frequently), if one believes that a company's value is out of whack to the upside, then shorting should be in the value investor's arsenal.

To: Craig Bartels who wrote (10899)	7/9/2000 11:11:45 PM
From: Michael Burry	1 Recommendation Read Replies (2) \| Respond to of 78465

Craig, I wouldn't go far as to say shorts are not part of a value investing strategy. To each his own, but one might argue that with bonds providing a weak counterweight to stocks over the last few decades, hedging with shorts might be something Graham would have considered by now had he been alive. He definitely was into market timing, and it wouldn't surprise me to learn that he felt that shorts had a place in a rich market as a hedge against a majority long equity position. And re: Paul's remark about hedging and shorts never coming up, I submit that Graham's Bonds/Equity 25/50/25 theory was meant to be the equivalent of a mild hedge strategy. As for me, I've come out ahead on my shorts over the years, but I much favor longs, and in a fairly priced or evem overpriced market will still overwhelming favor longs. BTW, I think it is ridiculous to say that one must lose nearly all one's money to have gained experience. I don't recall Buffett losing all his money at any given point. And I don't see where 30 years experience is any better than 5 years; the person matters much more. Good investing and keep contributing, Mike

To: Craig Bartels who wrote (10899)	7/10/2000 2:24:39 AM
From: jeffbas	Read Replies (2) \| Respond to of 78465

Craig, if you are prepared for a short to double or triple on you, what kind of strategy is it to take risks of 100-200% against you for the potential of up to 100% if the thing goes bankrupt, and realistically more like 50-75%. How can that be a risk/reward that is tolerable to you, when you can pick longs by the hundreds that have better risk/reward. Is this part of some overall market sensitivity neutralization strategy? I too watch the housing stocks, although in my case it is the manufactured housing stocks. I think that eventually a correctly timed purchase will deliver 5 times on your money on the right ones. Which and when is the trick. To Mike Burry - Ahhh, the exuberance of youth. You do not have a clue what the 1973-74 bear market was like and until you do, you won't know what I mean - and you won't learn it be watching someone else "dumber than you" lose their shirt. There were not any smart people in the market then - absolutely every type of stock was crushed. Would you believe value stocks with good growth prospects at 3 and 4 times earnings?

To: Craig Bartels who wrote (10899)	7/10/2000 3:12:24 AM
From: Paul Senior	Read Replies (3) \| Respond to of 78465

Well maybe it's also something about "I would rather learn from other peoples mistakes, then make the same ones." Pehaps we just see this quite differently. My guess about you is that your learnings are about technique. Learning from the mistakes of others who sell short, your response is to study the current successful practitioner, have a better plan of action than the average guy, and be more disciplined about sticking to it. (Maybe my descriptions aren't quite right, but the learnings are attempts to learn/fix/improve technique) Whereas my learning is, that most people can't get short-selling right, even hedge funds sometimes seem to blow up, there seem to be more people getting rich buying stocks than shorting them, ergo the odds would suggest I avoid spending much time/money at all in short selling. You get to say I am a little staid in my methods. On a positive note, I get to admire your opportunistic aggressiveness. From your profile you seem to be in value stocks, day-trades, swing trades--- everything. Surprised there's no options/leaps action. Meanwhile, in looking for common ground, some of the value stocks you choose/chose (e.g. ACK) seem worth a further look to me. Paul Senior, who says if you are in the market, then this game isn't over yet. Eight years playing the market gets you two notches for your belt. (You got through Fall '98 & 1st half '00 and are still here.) 7-8 months of heavy short-selling experience gets you a congratulation from me on your success, but zero notches. While it's of course about money, it's also - for those who haven't cashed out - about who will be left after the next notch point. Paul Senior