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

To: Michael Burry who wrote (361)	9/25/1998 3:46:00 PM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 4691

Hi Mike, <<In any case, before we get all high and mighty about thinking what we think Buffett thinks, he did buy that rent-a-jet company. No long history there. And its market to me seems complex and uncertain. And there's that silver venture that he's still sitting on. >> You mean FlightSafety? I didn't know they rented jets, I thought their chief business was training pilots. When I was a snot-nosed Air Cadet doing my pilot license in 1985, I remember seeing FlightSafety ads in various flying magazines. I was somewhat put off the company, because they very much exuded a certain snob appeal, catering to the upscale corporate market, with the highest prices in the industry to boot. In some sense, they do have a simple business - they train pilots. Aircraft technologies might change, the course material might change, but the need to train pilots to fly airplanes is a fairly simple idea. As for track record, I think they probably had a 15 year record at least. And though I don't know their earnings history, it would not surprise me if they showed steady revenue and earnings growth over that time, with favorable cash flows and a high ROE. (Knowing that Buffett bought them makes these sorts of predictions pretty cheap...;-) They were the leader in their field. Part of what put me off about them, their premier place and top flight pricing, is in fact exactly the sort of thing Buffett would want, I think. Even if overpriced premium training services offended the sensibilities of a 17 year old potential buyer of such services ;-) I never thought about FSI being a Buffett company, but the moment I heard that he had bought them, a light came on in my head and I instantly realized, "of course!". Just once, I'd like to beat him to the punch... Does anyone understand his motivation behind the silver deal? I understand that he feels there is a good long term demand case for silver. However, with the possibility of digital photography, and the fact that silver is a byproduct of other mining, the case doesn't leap out at me. Anyone have any guesses on this? - Daniel