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

To: James Clarke who wrote (259)	8/30/1998 10:48:00 AM
From: cfimx	Respond to of 4690

>>>I don't want to pay a fair price - I want to pay an unfair price. And so does Buffett.<<< I disagree. He wants a fair price. Thats why he strives to have Berkshire's share price trade at or close as possible to intrinsic value. So his partners get fair value when they exit, and when they enter. And he advocates ANY management do the same-strive to have the company trade at the intrinsic value. If he wants UNFAIR prices, why would he encourage American Business to follow his lead and do things that make the price of the stock reflect its intrinsic value more accurately and more often? In private deals, he certainly doesn't want to pay an unfair price. the private owners sometimes retain a small stake. He doesn't want them reading about how they got "ripped off" by Buffet. They're his partners. He wouldn't WANT to do that to them. In the early years. Buffet and Charlie tried to nickle and dime sellers of companies, SEE's Candies, for example. And they now understand what a great mistake that was. The company clearly was worth double or triple what they paid. Knowing what they know now, they would have paid nine times book for it, instead of three. In the markets, Buffet will surely take advantage of silly prices, but advises not to sit in cash waiting for them. Finally, if any deep value investor would have held their nose in say 1988 (or pick a year), and bought G at "fair Value," instead of waiting around for a calamity that never came around. they would be far far far better off having paid "fair" value, than not. His point is clear. COMPANY selection is much much more important than the price you pay, although there is a price that would make it a lousy purchase. My strategy: I am ready to buy G on any weakness this coming week. If it keeps going down, I'll buy more.

To: James Clarke who wrote (259)	8/30/1998 12:57:00 PM
From: Michael Burry	Read Replies (2) \| Respond to of 4690

OK, Gilette's a great company, but revenues fell and profits squeaked upward last year. It's a great company because it introduced this new triple razor and even I'm using it. But will I pay over 30X earnings for a company that is barely if at all growing revenues? Especially when there are so many other stocks that are more worthy. So far, the S&P has fallen, but small and mid caps have fallen harder. The S&P's top 15-20 are even more overvalued relative to those of us here on Earth than they were at the market top. I still think we're a long way from buying those types of Buffett companies. There's nothing but sentiment to keep them falling another 25-50% easy. When small-caps outperform once again and large cap is out, then I'll be looking at Gilette and its ilk. Mike