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

To: Paul Senior who wrote (2725)	12/10/1997 10:47:00 AM
From: Michael Burry	Read Replies (1) \| Respond to of 78595

Paul, I see it the same way, but I'm getting pretty shy about trusting management comments after OXHP and CREAF. The funny thing is that when I started writing professionally, I maintained talking to the company in any but face-to-face situations colored my analysis of the numbers, so I didn't do it. But this is journalism, not buy-side analysis - it's my job to get quotes from the company and the analysts. And guess what, it colored my analysis. When you have Creative's head Tech engineer telling you how "incredible" the products are, it's hard say wait, how about these inventories... Down the slippery slope of cynicism. It's one thing when you read about others getting lied to, but when they mislead you to your own face... I think I might add the "Lie" factor to any further analysis I do - the more analysts in bed with management, the greater the likelihood of funny business in the financial statements. GNT's Lie Factor is pretty high. Good Investing, Mike

To: Paul Senior who wrote (2725)	12/10/1997 4:21:00 PM
From: bananawind	Read Replies (1) \| Respond to of 78595

Paul, I haven't taken the time to look at GNT's footnotes but suspect what you may be missing is some very agressive accounting techniques. This is second hand, so do your own investigation. As I understand it, when they originate and then later securitize a mortgage GNT takes a very agressive stance in their treatment of the spread between the underlying mortgage and the securitized instrument. This essentially amounts to accelerating future revenues to the present accounting period. Of course, when those mortgages get paid back sooner than expected the chickens come home to roost and the previously accelerated revenues must be reversed. Hope this adds something. -JLF

To: Paul Senior who wrote (2725)	12/16/1997 5:35:00 PM
From: Allen Furlan	Read Replies (2) \| Respond to of 78595

How does the small investor analyse the consumer finance sector? SEC filings certainly do not provide sufficient detail on loan quality. Looking at yahoo business summary I immediately want to know how GNT can make 318 million on 937 million in revenues? Is there really a tooth fairy? I recently initiated a small position of AAC with a stock purchase and ratio write of out of the money calls only because the stock seemed undervalued relative to past performance and so called book value. But I am certain that such parameters are not sufficient to classify a stock as a value play. The entire sector seems relatively inexpensive based on these parameters but such thinking is contrary to the value investors rule of truly understanding the business of the purchase.