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

To: Paul Senior who wrote (801)	12/27/1998 10:45:00 AM
From: cfimx	Read Replies (1) \| Respond to of 4691

Paul, this is a key distinction with Buffet stocks. There are plenty of Buffet companies in the universe of all stocks. Plenty for people like us, but not for him. Buffet NEEDS to really look at what are called LAGRE cap or better yet, MEGACAP companies. Then they have to be HIS kind of company, then they have to be cheap. That's a tough row to hoe. WE (as non Forbes 400 folk,) on the other hand, have a much LARGER universe of companies to draw from. It is the ENTIRE universe of stocks. In some cases, a Buffetoligist could buy 100 shares of a $20 MICRO CAP stock and have it be a really meaningful position. It would still be a BUFFET style company, just not one he would BE ABlE to consider. He may in fact LOVE the smaller company though, more than his big ones!! But buying some just wouldn't impact the huge net worth of Berkshire. So, all in all, Buffet followers have had PLENTY of chances to buy Buffet stocks over the last few years that Buffet himself wouldn't have been able to consider at all. For example, Buffet loves newspapers and broadcasters. There are a lot of those companies out there like Central Newspapers, Gannet, Lee, Pulitzer, Hearst, etc. but either the float is small, or there are few shares outstanding, or they are just small companies (Pulitzer) that are controlled by a large shareholder. In fact the book LISTS a number of companies in the back that Buffet likes or loves, but COULDN'T possibly consider due to their size. I hope this helps you understand that while WEB may have sat on his hands by necessity, it doesn't follow that his FOLLOWERS have had to as well. In fact, if Buffet had a much smaller pool of capital to work with, I am convinced the last three years would have been fruitful ( for new ideas) for HIM, as it has for so many other investors. In some of my posts on this thread I have encouraged participants to BROADEN their horizons. WE don't have to limit ourselves to what Buffet, by necessity, NEEDS to be buying. We should imagine that Buffet has only a million dollars to work with. What would he be DOING NOW if THAT were the case? I think he would be finding things to buy. It's true that by shifting our focus, we STILL may not turn up ANYTHING in this richly priced market, but at least we'd be turning over the RIGHT rocks.

To: Paul Senior who wrote (801)	12/27/1998 2:09:00 PM
From: Michael Burry	Respond to of 4691

Paul, I love that you argue every point so much, but surely you see an error in your logic on this subject? Buffett is in it now because he has grown to this size thanks to capital gains going back to the early 60's. Him being largely in the market and having those now-sizable very old positions do so well for him is entirely different than assuming he would have been jumping in and buying KO and such 3 years ago. In fact, his annual reports suggest quite the opposite, and I would say that to the extent he is able he has largely avoided committing to large new stock positions of late, and even started to sell some which have been dear. He isn't always cautionary. In 1979 he was pretty enthusiastic about the bargains in the market in his annual report. I do regard him as the world's greatest investor, but IMO reading his current involvement and success in the market as an admonition to would-be Buffettologists who started less than 5 years ago is not cogent. Mike