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

To: James Clarke who wrote (3800)	4/11/1998 9:38:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78512

And another positive article on St Joe; also Telebras, from Fortune: pathfinder.com pathfinder.com Paul

To: James Clarke who wrote (3800)	4/17/1998 12:52:00 AM
From: Wright Sullivan	Read Replies (2) \| Respond to of 78512

James: I wanted to make sure you had heard about FLA's 4:1 split. FLA is up 4-5% today, was even higher earlier in the day. I still plan to buy FLA, because I think you are right that St. Joe will almost certainly make another run at FLA. And FLA is a good company by itself. I wonder if SJP is considering buying FLA and then selling off both railroads (FEC and Appalachicola), keeping only the acreage. FEC is no obscure short line. It is in a very unique position with its Jax-Miami run. The big RR's like Norfolk & Southern would seem to be logical buyers, but they can't buy it until SJP relinquishes its 54% stake. But for now, I share your feelings that we are somewhere near a overall market top. I can't find many stocks to buy that have the margin of safety I need to buy. I am about 25% cash right now, and would be around 65% if I could bring myself to sell my Berkshire Hathaway. That is a tough call--is it worthwhile for the BRK shareholder to pay an additional premium to own stocks (G, KO, Disney, etc.) which are already at mind-boggling premiums themselves? The easy answer is "heck, no", but the other easy answer comes from one glance at Buffett's history. I think I'll just sit tight with BRK and brace for a few rough years and try to ignore Mr. Market. Which is quite difficult when Mr. Market is daily offering you a king's ransom for a piece of the mysterious and wondrous BRK. In any case, I completely agree with your take on the market. Even if this is not the top, it seems extremely unlikely that we will see anything like the gains of recent years over the next 5 or 10 years. And there is so much dumb money in the market. Dumb as in: "I'm buying this fund because of it has a good track record (but I have no clue what it owns)." I don't mean dumb people, not at all, just dumb money that isn't buying value, just buying something generic called "stocks". I think we are in for a hammering, and I think it will probably be a long drawn out sort of thing over several or many years. I know others disagree strongly or feel that this is an emotional response, but I agree with you that the signs of a frothy market are everywhere. Sure, it might go higher, much higher, just like Japan kept on going thru the roof 10 years ago, but I get jittery when I feel that much of my portfolio's value is held up more by market froth than by underlying value. Sorry such a long post. But you hit a nerve a few days ago, because I was having the same thoughts at the same time (why else would I spend most of Saturday comparing real estate plays like FLA SJP TRC & TPL?). The logic behind your portfolio reallocation made perfect sense to me. Buy low, sell high. What a unique concept. By the way (if anyone is still reading this), does anyone have any comments on TPL (Texas Pacific Land Trust)? This is one weird vehicle, and there is value here, but will it ever get unlocked? Kind regards and good investing, Wright Sullivan