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To: Tomato who wrote (5590)12/29/1998 2:08:00 PM
From: Michael Burry  Respond to of 78747
 
Small caps are underpriced vs large caps with a larger disparity than I've ever known. The relative PE ratio of small caps to large caps is historically low when it gets around 1, since small caps typically grow faster. And it hit a low of 1.04 or thereabouts in the early 90's. Now it's like 0.7 or something like that. The market is putting a huge premium on the biggest names in these times of global uncertainty. Small caps have underperformed since 1994, and the Russell 2000 is down this year, while the Nasdaq 100 is up over 80%. I just can't help but think I would be late to the party if now I finally started buying the big caps.

Mike



To: Tomato who wrote (5590)12/29/1998 4:04:00 PM
From: Michael Burry  Read Replies (5) | Respond to of 78747
 
Well, I bought some Finish Line and some LaSalle Hotels today, doubled down on Deswell again. Shoe retailers, REITs, shoe manufacturers, oils, metals, foreign contract manufacturers - I'm really buying the excrement of the market now.

And what am I selling? I shorted Amazon.com today at 337 and change. Very few shares. On principle. As a blue-blooded contrarian I just couldn't sit idly by anymore.

Good investing,
Mike


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