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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (38352)	12/6/1998 2:53:00 PM
From: accountclosed	Read Replies (2) \| Respond to of 132070

Coby, one thing an investor can do is not look to the market to validate the value of one's holdings. MB can obviously speak for himself, but I think what he is saying about HAL is that he decides whether to buy it based on the value he sees in it and the price he can buy it at. That is not the same thing as predicting what the market will do. It is sort of like ignoring peer pressure. The market is crazy at all times. If someone offers you 1.00 for your house, you chuckle and don't give it a second thought. If they offer you significantly more than what you value it at, you consider selling. I mark my portfolio to market every day; always have. But that is not the same thing as assessing the value of my positions or the quality of my results. I think people misunderstand what Mike says. I find him more reactive than predictive. And most listeners try to find prediction in everything he says.

To: Ilaine who wrote (38352)	12/7/1998 10:51:00 AM
From: Knighty Tin	Read Replies (4) \| Respond to of 132070

Coby, Agree with all except that I expect the economy to behave rationally and bring oil back, not investors to behave rationally and bring HAL back. Different concept. If the economy and oil perform as I expect, I will be paid enough by Hal, itself, not the market, to make this a good investment. If the market wises up, that means I get paid more, sooner. Which I really hope and think will happen. But my contrarian strategy looks to the company's worth as an ongoing business, as though I was the only owner, not the market's perception of the company's worth. Options. Yes, long options limit risk. But they do not limit upside potential. The cost of premiums is a cost, but not a limiting cost. I don't understand the 11% number. Is that from my 10% statement about Hal? I expect to make much more than 11% and have done so. By a lot. For example, in both 1995 and 1996, I made more than 100% on the total 90/10 account. That includes the 90% in money markets. In 1997, my returns were much worse in that account, up 27%, which actually underperformed the S&P. Some nice winners but also many total wipeouts. I wasn't unhappy with that, though after 1996 and 1995, it felt kinda puny. This year, I am up about 60% on the total. I have had some huge winners, but I have suffered from having low percentages committed to them. For example, my puts on the XAL and the DRG were major league homeruns, but I only had one third positions committed to each when the fit hit the shan. Citicorp was a huge winner, but I took a number of one third wipeouts on that position before it came true and only had two thirds worth of puts at the top. And then I cut it to one third much too quickly. A bit gun shy. I think my 90/10 portfolio this year, with the market twice hitting new highs, benefitted from my conservatism. But it is also possible I could have been much further ahead had I cranked out full positions in both up and down markets. I hope that 11% question is not caused by me mixing up the income vs. the 90/10. MB