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

To: Fredman who wrote (661)	12/9/1998 6:50:00 PM
From: Michael Burry	Read Replies (2) \| Respond to of 4691

Re: oils, I've recently loaded up on TDW, RIG, NE, and LTR, which owns half of DO. As far as I'm concerned the surest bets in the stock market right now for those willing to wait. But Buffett? No, I'm not using Buffett as my guiding light on these. Just plain vanilla value investing and common sense. Mike

To: Fredman who wrote (661)	12/9/1998 7:43:00 PM
From: James Clarke	Read Replies (2) \| Respond to of 4691

I agree with you on oil services to the point that it is "fishing in the right pond". I sense there must be value there, but I've got a problem myself. Oil services is about as far outside my circle of competence as Thai cooking - maybe further - I've been to Thailand. (Actually the second stock I ever bought was a $10 million contract driller trading below net asset value. It got taken over 6 months later and I made 30%. But that was pure luck - thank you Ben Graham.) Is there what I would call a "Buffett cyclical" in this sector? SLB? That stock just does not look cheap on the multiples, except that it is down. I know, I know - very similar to Boeing. But as an airline analyst I know something about Boeing, so I consider it within my circle of competence. Is this a sector one could understand enough to get sure about valuation? I am very interested, as I'm sure many others are. What is the Buffett case on a Schlumberger or a Halliberton. Specifically, 1) What is the mid-cycle return on equity, and how long a history does that number have? 2) What is the history of entry into this industry? If you asked me in 1975 what are the top two companies in this industry, would SLB and Halliberton have been at or near the top of the list? 3) What precisely is the barrier to entry? 4) What is management's reputation? I am not challenging anybody's conclusions - this sector has all the telltale signs of value. I am begging for information out of complete ignorance and trying to learn something. The great thing about the internet is that there is usually somebody out there who is an expert on any given sector. Jim