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

To: James Clarke who wrote (2445)	11/15/1997 12:26:00 AM
From: Michael Burry	Read Replies (2) \| Respond to of 78627

My two cents on Buffett: Reading both Graham and Fisher has helped me understand Buffett's approach much more than I did just from reading American Capitalist and the annual reports. I guess I took the same approach Buffett did, studying Graham first, then reading Fisher. Now, every one of Buffett's purchases make sense from a value perspective, if not a strict Graham value perspective. The fact that he has NEVER had a down year over such a long period of time while averaging something like 28% returns is the only proof needed that he's the greatest investor ever. Now, can we apply his methods? I'm not sure. I mean, Buffett, despite his hands-off approach, is not totally uninvolved in the management. The newspapers are good examples, but it seems that all his businesses move to new levels of achievement in terms of cash flow, returns to shareholders, and cash flow after he's on board. Heck, I know what would've happened if I'd bought the Buffalo newspaper - zippo. Further the guy is a certified genius who's talent is in shareholder returns. Would he have made a good neurosurgeon or psychiatrist? Not necessarily. Should I expect to do as well as him without his specific talent? Not at all. To each his own talents. I'm just content to sit back and dissect each move he's made now. I mean, his movement into bonds (zeroes no less) was incredibly prescient. Throughout the huge 20 year run up in stocks he held on, then makes a massive switch to zeroes within months of the uncoupling of the stock and bond markets. Wow. Good Investing, Mike

To: James Clarke who wrote (2445)	11/15/1997 5:05:00 AM
From: John Langston	Respond to of 78627

James: If you appreciate Buffet, you will extol BUFFETOLOGY. My sense is that Mary Buffet distils the confusion concerning his methodology, the misunderstanding about his shorter-term holdings (which accounts for 25% of his return over the years), his understanding of the stock of extraordinary companies as an "equity/bond with an expanding coupon," a thorough explanation of "business-like investing," how the magic of compounding is a pillar of his philosophy, the "expanding intrinsic value," the necessity of a minimum 15% return, the myth of diversification, his view of earnings, how the avoidance of taxation for as long as possible is central to his methodology, how he no longer quantifies a stock's intrinsic value. I think she explains very well the differences between Buffet's methodology and pure Grahamesque value investing. Mary has astutely written the book in two sections: qualitative, then quantitative in an easy-to-understand format. Thus far, after one complete reading, my only disappointment is her catty, grossly abbreviated explanation of Buffet's sell strategy. I'm hoping that some of the seasoned value investors, such as yourself, that frequent this thread will read the book and dialog about it. Thanks for your response. John