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

To: Paul Senior who wrote (3679)	3/27/1998 6:08:00 PM
From: Terrapin	Read Replies (1) \| Respond to of 78666

Hi Paul, You're absolutely right: I am nowhere near operating that way! :) BUT, that is my goal. As my inspiration I use Mike Burry's analysis of the dreaded Oxford Health Plans. He reviewed and posted the numbers and felt that it was a reasonably good buy on the basis of market over-reaction. Then, as the numbers continued to come out of that company he continued to plug them into his model and altered his position accordingly. What impressed me so greatly was his reliance on the numbers to make a rational decision in a difficult and potentially emotional situation. So, my feeling is that a reliance on the numbers as they are released in quarterly reports ought to give you present value. From what my new book from good ole uncle Ben says I should be able to determine what my gain will be when the market value reaches present value given the tax I will have to pay when I sell. If this potential gain is less than the potential gain I could get by having my money in another stock then I figure I'm better off doing that. That is the goal anyways and I've probably mis-stated it. Having said that, I should also say that I am no good at this. I held OXHP when Mike sold and if it weren't for a heroic averaging-down maneuver at $14 I probably would still be crying! Conversely, in the stocks that have actually gone up I've watched as they exceeded my guess at value and they are still going up!! Don't get me wrong - that's a good thing - but it tells me that I am still not able to determine a solid valuation for this market. Whatever I may say though I cannot deny that my best results have come from doing the very least. When I try to get fancy and shift things around then I end up being in the wrong place at the wrong time. I tend now to be in a sort of holding pattern with a few companies I am very pleased with while looking for exit strategies for the many with which I am displeased. I continue to learn and these discussions are a tremendous help. Enjoy your posts, and please call me John :)