Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: jeffbas who wrote (3364)	2/26/1998 10:13:00 PM
From: Michael Burry	Read Replies (3) \| Respond to of 78519

Jeffrey, I've noticed the same thing. HYDEA has been the worst performing stock in my portfolio of value stocks. However, I regard it as a special case. Between the HYDEA's and DELL's of the world, I found many stocks that are valuable yet participate in market moves, allowing me to stay ahead of the market by a substantial margin this year. But even these stocks have moved up too far too fast. I bought PHSYA at 48 for the long term, but here it is at 60 1/2. I bought BMC for two years, and it goes from 16 to 20. Medusa moves from 39 7/8 to 47. I am spending no small amount of time trying to figure out this good fortune, and I've concluded it's a bad omen for the market. I think that there is a limit to the overvaluation of the big names, and that people are moving into liquid small-mid caps. But they still want it liquid, as they eye the exits. The ultra-small cap values like HYDEA and ELAMF are not seeing any strength. Why? Institutions are putting an extra premium on liquidity due to the market heights. And individuals are giving up and trading their HYDEA for Index funds and MSFT. The technicals of the market have divorced themselves from the fundamental picture, even if you count mutual fund inflows. I recently read an interesting article that stated the baby boomer rollover into mutual funds is less than we think. As they pour money into mutual funds, they are selling individual stocks, in a ratio that is not nearly as far from 1:1 as people think. This exacerbates liquidity's premium. I think we've all seen this happen over the last 5 years. Re: being in the right strategy, I refuse to believe that long-term, buying overvalued stocks will beat undervalued stocks. And I refuse to pay the liquidity premium in an overheated market. Re: an alternative. Jump in with the crowd. I've been such a perma-bear the last year and half. I'll just let everyone here know when I start buying MSFT or DELL. Then you can safely leave the market ;o). FYI, there's a "Going with the Flow" article headlining the MSN Investor web site. Good Investing, Mike