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

To: James Clarke who wrote (4809)	8/24/1998 8:05:00 PM
From: Michael Burry	Respond to of 78596

Jim, Re: reasoning. I own 4 stocks that have killed me this year: Deswell, New Holland, YPF, and St. Joe. To me, NH and CSE are interchangeable at current prices. St. Joe and FLA likewise. I switched solely to lock in some tax losses with virtually no penalty to the upside. Irony of ironies, I actually had some realized gains this year that I wished to offset. I also have some untaxed income from Microsoft, so all in all converting my "paper" losses to real losses doesn't hurt and probably helps. The YPF/Telebras switch is not so simple, but basically includes the above reasoning, and Deswell I just can't sell and will probably buy more. I'm still 33% cash now and looking for good opps. Mike

To: James Clarke who wrote (4809)	8/25/1998 3:40:00 PM
From: peter michaelson	Read Replies (1) \| Respond to of 78596

Mike, Jim: One interesting strategy is to trade, say, Case, NH and Deere back and forth yet always maintain a long position in the industry Say you think all are good companies and all have pretty much the same prospects, which you like. Decide within yourself the relative valuations between the 3, e.g. Case= 1.2x NH NH = 1.43x Deere. Commit to the industry by buying the stock which is at the lowest price relative to the others at the moment. As the market prices stray from the "correct" relative valuations trade them back and forth as their market prices vary up and down relative to one another. But always maintain the net long position you committed to early on. Stay invested in one of the three at all times for the 2 - 4 years until all are over-priced (i.e. market recognizes how damned smart you are!). It works! You can play the market gyrations and be a long-term investor simultaneously. Sort of like being married and having a mistress! But, don't start thinking the mistress would make a good wife. Stay long the industry at all times. You married her, stick with her until she bears fruit and the kids are in med/bus school! Peter