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

To: James Clarke who wrote (1093)	3/3/1999 6:19:00 PM
From: porcupine --''''>	Respond to of 4691

James: porx office is even less impressive --'''':>

To: James Clarke who wrote (1093)	3/4/1999 2:57:00 PM
From: cfimx	Respond to of 4691

james, I did not realize he was much more circumspect before. I just got the impression he was saying that the "speculators" were in for a comeuppance but others shouldn't change course provided they have a rational approach. I was cruising around the outstanding investor site and I was surprised that they have some stuff out there for non-subscribers. they have an audio section and they had the complete 1997 annual meeting of FFC, Fund American Cos. I was interested because John Byrne, the guy who saved Geico is Chairman and WAS CEO. Anyway IT looks appealing for a number of reasons (buffet like attention to owners for one) but there is also a tie in to abk, a company you mentioned. it turns out that ffc owns a lot of FSA, the FOURTH largest municipal insurer. And its CEO spoke at the meeting. He essentially said what you said about the annuity like character of the business. It was eerie. Anyway, the FFC people absolutely are gaga over this business and the CEO essentially almost guaranteed 13% growth "as far as the eye can see" with predictable steady earnings, and an ROE of perhaps 13% to 15%. As James pointed out, over the long haul, it is a license to print money. And growing consistently at that rate won't attract the speculators either so it should for the most part STAY reasonably valued over this stretch. But it LOOKS cheap NOW. FFC has a tiny float and don't promote for a second so you really have to DISCOVER this thing on your own. No BROKER is going to sell you this $130 thing that will probably grow earnings at an "unexciting" 12% to 15% rates for years. It trades a little above book.

To: James Clarke who wrote (1093)	3/5/1999 10:41:00 AM
From: porcupine --''''>	Respond to of 4691

"I guess I disagree with your assessment, Porc. Buffett has been asked THE QUESTION many many times and has always dodged it. I have never heard him say as clearly as he did last night that the market is headed for big trouble." James, I meant to contradict the wire service reports' implication that Buffett's tone was alarmist. Buff's first rebuff was along the lines of: There have been high prices in the past 100 years and there will be periods of high prices over the next 100 years, but the Market will still be around a 100 years from now. Yet, the Reuters leader was "Buffett Sees Danger In Stock Market". But, now that you mention it, perhaps his most telling remark was a classic Buffettism that he slipped in near the end of the interview: If you have a town of 100 people trading homes among themselves for 4 years, and each year the average price increases by 20%, when someone leaves town and puts their house on the market, it is then that you find out what all the others are really worth. (There was that soft chuckle of his as he said it --'''':> ) Minor notes: Though he's been quoted as saying he doesn't care if the Market closes for the next 20 years, in this interview it was reduced to about 2 years. And then there was that moment when Koppel asked Buff why he wasn't more outspoken about public issues, noting as he blushingly looked down at the table top, "George Soros certainly likes to meddle." porc --'''':>