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

To: Michael Burry who wrote (6041)	2/16/1999 11:01:00 AM
From: James Clarke	Respond to of 78507

Mike - Champion (CHB) wasn't mine - I believe it was Shane, but I can't find the post in question. Credit where its due. My money's always been on Claton (CMH) in the same sector. I don't think you go wrong with either at these prices. JJC

To: Michael Burry who wrote (6041)	2/16/1999 6:33:00 PM
From: James Clarke	Read Replies (1) \| Respond to of 78507

I took an initial position in Tidewater (TDW) today at 20 3/8. I know this is a Mike Burry favorite, but it might be of note that the two of us came to this conclusion completely independently of each other. I have never invested in an oil related stock - its an industry I have always considered outside my circle of competence. But after spending the weekend with Tidewater's financials, I just don't see the downside if you're willing to hang in there even if it takes three years. And the upside is that this company will be stronger and bigger in the next good times for the industry. Wall Street is focused on the next quarter, which looks like doomsday. I recogize that. I also recognize that I can provide no reason for oil economics to get better in the following quarter or the quarter after that or the quarter after that...But who will kid themselves that they can see more than a few months out in an industry like this? The point is that everybody assumes this is a loser forever (in Wall Street terms today forever = more than two quarters). I'll take those odds. But long term, the risk vs. reward looks absolutely perfect. As I'm sure Mike has already pointed out, this company is the leader in its industry, has zero debt, and earned about $5 a share of FREE CASH FLOW at last year's peak. It is likely to be free cash flow positive even at the bottom. These guys went out last quarter and bought back 3% of their shares at very low prices without taking on a dime of debt. The industry looks absolutely awful, but the stock is down from 70 to 20. Once again NO DEBT. If the balance sheet didn't look like that, I would not have touched it. This company is worth over $40 a share by my calculations. It trades at 20. JJC