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

To: Scott Mc who wrote (3515)	3/12/1998 1:53:00 PM
From: Michael Burry	1 Recommendation Read Replies (3) \| Respond to of 78640

Well, on the subject of patience and waiting for the price - a subject about which I have been somewhat stubbornly extreme of late - let me just relate how I recently lost money by ignoring my own rules and advice. I recently purchased Swisher International (SWR), knowing that inventories were high, that the cigar fad was fading, and that they would not be able to improve as drastically in the near future as they had in the recent past. The stock price was down near 52 week lows, and the valuations all looked in order -~60% ROE and a P/B of 1.2. Insiders had bought at the 14.5 range last year, and I felt comfortable buying at 15. So I did. If I had only applied the same logic to this one as I had to Nike. I failed to notice that all the analysts still had strong buys on the stock. The day after I bought, the company preannounced - earnings and revenues would be flat with last year. I think, we knew this - last year was stellar, and in any case even with flat earnings the numbers are still great. As the stock opened the next morning, I noticed it didn't budge. Great. Dodged a bullet. I patted myself on the back. No shares traded until the downgrades. Then came the downgrades. 4 X the avg daily volume traded in short order, and the stock fell over 10% to 13, which is where it stands now. Since my original position was a partial position, I'll now convert it to a full position. I am still comfortable with the stock, and it's a long-term holding - it's a 137 year old company and I bet it won't be going down the tubes, but I didn't get the best price despite having all the knowledge necessary to do so. Nike has had a bit of a low volume suckers rally here to 47. The shorts may become the true suckers when Berkshire posts its annual report this Saturday on its web site - Nike shares would surely jump on any positive mention. We'll see if I pay for my patience with Nike, but I am thinking I won't. Patience hasn't hurt me yet. I'll try to remember that. Good Investing, Mike