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

To: Michael Burry who wrote (4232)	6/7/1998 10:12:00 PM
From: Paul Senior	Respond to of 78476

Mike. Well, I've come back this weekend to look at MWY: and I did notice it when you first mentioned it here, and I see it on your web page- also the MWY posts on SI. Bottom line is that I agree with you. Actually it's a buy here imo. BUTS, HOWEVERS, and DOUBTS follow -g-: I'm not understanding your (Sealpoint) reasoning why MWY is better vis-a-vis. ERTS, but I think you are correct that MWY is a good buy. This darn stock - MWY - causes me to question my whole logic in investing --- I hate that -g-. Let me recap what I believe: These game stocks are like movie stocks (which I sometimes buy --hello VO -g-). A hit can come out of the blue - from a small shop or a big shop. Where the hit will be - that is not predictable. It's not correct to value these kinds of software companies on book value. After all, it costs only pennies to reproduce a hit game on a CD. I do not know how to value such companies. One way might be price to sales. (Yes, we've kinda beat this psr thing, but maybe it will actually be helpful to us here.) There are a bunch of such game companies out there. If I use number of employees per firm -- and why not? - The more employees, maybe the more chance for one of 'em to come up with a hit -- then clearly ERTS is the big kid on the block (from what I can tell) with over 1000. And this is reflected in ERTS's stock price - it looks pretty high to me. MWY with a psr of 1.3 and 326 employees (per Yahoo) looks like a VERY GOOD BET to me. I like it better than THQI with a similar psr (1.3) and only 81 employees. I like that you have reported that there's insider buying on MWY. I don't recall seeing this for THQI or ERTS on their threads. If you read the THQI thread, there's a guy there who's a professional analyst. This guy IMO will know more on his pinky finger than I will ever know about THQI or the software games business. Actually, he may know more on that finger than I know in toto -g-. He seems very, very good. That he likes THQI and I am so simplistic in my MWY decision (and maybe even utterly misinformed & confused about THQI and MWY and ERTS) says it all -g-. Once again -- over and over and over again - it comes down to: Does superior knowledge lead to superior investment performance? And you know-- I believe it does not (somebody show me a study which shows that it does); but man, I hate to go against (well, away from, not really against) a Pro who seems to really, really know his stuff. But I will. IMO, the buy is MWY. You get a reasonable pe, perhaps people selling because of the spin-off- and as you allude- even more selling as they exit,an okay psr, and a shot -- a very good shot-- that MWY could deliver a blockbuster game. Anecdotal info. -g-. The 7-year old I hang with likes his family Nintendo 64 (Nintendo --NTDOY-- arggh I missed it at last year at 8-9-- thought ELAMF which I believe got the South American assembly contract would be better -- wrong, wrong, wrong) and is saving to buy his 13 year-old brother a Nintendo game for his birthday present. And they all still like to go to arcade games (and with me and my quarters). I do not like any of this (it's not about the .25 pieces but shouldn't these punks be doing history papers or algebra or something? Shouldn't these games be rated R?-- (Rhetorical). These are normal kids - as far as I can tell (I ain't a psychologist). So maybe it's repeated many, many times all over the US, Canada, etc. (I won't opine about it, though it does pain me -g-) Believe I will try to match your order size on Monday. Not too happy coming in behind you 2 points higher though. But I'll stick with my opinion- MWY is a buy for long term investors. It's a GARP stock---not necessarily a value stock. Looking for 18 in 18 months. JMO,Paul. (and I know how James Bond can escape at the end of the the OO7 game -g-)