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

To: Chuzzlewit who wrote (805)	12/27/1998 1:52:00 PM
From: cfimx	Respond to of 4691

>>It seems to be more concerned with the predictability of future cash flows, and its insistence on large capitalization stocks makes finding "undervalued" stocks virtually impossible << Where, might I ask, does it insist on large capitalization stocks, in the Buffet "manual"? Let me answer this for you since you won't or can't. There is no such insistence. Was Dairy Queen a Large Capitalization stock Chuzz? Flight Safety? Hey, Chuzz, I think I hear Michael Dell calling you back to the Dell thread. The TULIPS need pumping up.

To: Chuzzlewit who wrote (805)	12/27/1998 1:53:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 4691

Many of them are unproven, with untested managements, and anything but predictable earnings. But there were those of us who saw that promise in companies like MSFT and CPQ in the early to mid 1980's, and DELL and CSCO and AOL in the 90's. My entire contention is that Buffett is ill-equipped to evaluate those kinds off opportunities. The question is, "with what consistency can individual investors even of your quality spot these situations?" To my knowledge, there hasn't been a single other investor this century who over a 20 year+ span has been earn superior returns every year without a single losing year. Buffett's streak is now at nearly 40 years, and remarkably includes 73-74. If he still can't deal with unpredictable earnings, then you are ill-advised to claim that you can do so and be correct consistently. My claim is not against growth investing. Phil Fisher certainly outlines quite a case for it, and Buffett certainly was influenced. And Phil was investing in things like TI's IPO and Motorola's PO's. But I don't see how the individual investor can know what is necessary to know in growth stocks in a rabid bull. How does this work? If you've ever been inside a billion-plus corporation, hobnobbing with Directors and VPs, then you know that insider trading, self-serving actions, and indiscreet relations with usually at least 1 or 2 analysts, are all rampant. It is very very rare that management ever really thinks of the shareholder first. I challenge anyone out there who really knows how IR works to refute me on this point (I expect a response). And it is even rarer that the individual investor will ever not be the last to know that some bad news or industry shift is afoot. In this day and age, the individual investor cannot pull off Fisher's "scuttlebutt" effectively enough to be on the cutting edge of even one hot stock, such as those of which you speak. Chuzzlewit, really, if you know what it takes to spot these up and comers that are, in your own words "unproven, with untested managements, and anything but predictable earnings" then by all means start a web page, publish your record, and reap the rewards that you certainly deserve. I don't mean that as a slight, but you must know you're wasting your time here if you have these skills. Those of us that don't feel we have them, or don't believe it is possible, will not change our way of thinking on the subject. Good investing, Mike