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

To: James Clarke who wrote (2772)	12/15/1997 8:17:00 PM
From: Jurgis Bekepuris	Respond to of 78602

James, Take a look at my tech investing approach... and good luck. :-) Message 2889439 Raimondas

To: James Clarke who wrote (2772)	12/15/1997 8:43:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 78602

Let's look at HNH It's in the same type of biz as DYA was. DYA was around 30 when it was brought up here on this thread. Moved to 45 with WHX's original bid, and eventually hit 90. That accounts for HNH's premium to the bid. HNH provides diversification, is cyclical but has solid earnings of about $2 share pretty consistently with good ROE. To the 360M price you have to add the 120M in LT debt net of cash. Is it a good deal for WHX? The CEO seems to be pursuing some sort of acquisition strategy - he didn't get Teledyne or DYA and turns to others in the general industry and sees HNH. Looks good, so let's float some debt and buy this sucker. That explains the senior notes (I couldn't figure out why they were taking on more debt with their liquidity - in retrospect we should've been looking ourselves for the next likely acquisition - <g>). How about WHX shareholders? Well, obviously the CEO knows value when he sees it, buying back a bunch of WHX at less than $10, and we know Teledyne and DYA ultimately were worth much more than they were when WHX first showed interest. Is HNH another example of value revealed to the world? The market thinks so, with shares over $2 over the offer. Will WHX get its prize finally? We'll see, but it appears that the market has said, "We want a better price." Is this deal accretive? It's financing the $480M price at 9%, which is 43 million in interest per year. 1996 EBIT is 68M. So am I correct in saying it's mildly accretive? And if the price goes up to say $40 share, are we breaking the threshold? Where oh where has my margin of safety gone? Them's my thoughts. Good Investing, Mike

To: James Clarke who wrote (2772)	12/15/1997 9:22:00 PM
From: Michael Burry	Respond to of 78602

James, What an individual decision for a value investor! My goal is to own a little DD (Quantum), a little semi (Intel, Speedfam at the right price), a little software (?). That way I won't miss it when tech runs and I won't be hurt too much when it stumbles. I won't resist the urge to invest in them if only because my hometown is Silly Valley and they are so easy to investigate there (plus my high school buddies,inlaws and my brother are always feeding me ideas). Dataquest is like two blocks from my house. It ain't Nebraska and I ain't Warren Buffett, so there'll always be tech in my portfolio. But having dealt with some of them on the inside as a contractor and an IBM employee, it's easy to see that many of them are rotten and you can't glean it from the balance sheet. Good Investing, Mike

To: James Clarke who wrote (2772)	12/15/1997 11:28:00 PM
From: TimbaBear	Respond to of 78602

Buffet had made a lot of his money when techs started to become popular....it depends on how old you are and how long you plan on investing....tech stocks are here to stay and will provide many opportunities for good investments....if you are going to be in the market for a number of years to come, I don't think it is wise to eliminate such a large segment from consideration. I don't know how to mine, refine, or market steel.....but I know how to evaluate fundamentals and trends.....same things apply to all businesses....just take your time. As far as being greedy, if you mean by that that you lose money by trying to make money, then it doesn't matter what business the company you own stock is engaged in......if you mean by that that you make money while trying to make money, then that is how it is supposed to work :)