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

To: Michael Burry who wrote (6639)	4/8/1999 10:43:00 PM
From: James Clarke	Read Replies (2) \| Respond to of 78567

Mike, I agree with the pessimists. If a rising tide don't lift your particular boat, a tidal wave ain't going to either. Just thought that one up. Pretty catchy, eh? I have two ideas I am just itching to invest in right now that fit all my characteristics, but I am going to wait until the market breaks. If the market breaks and these two small cap value stocks tread water, I've lost nothing - I can buy them at the same price. But I think I will get a much better opportunity if I am patient. [Paul, you don't even have to type it - I know you well enough to know exactly what you are about to tell me.] JJC

To: Michael Burry who wrote (6639)	4/9/1999 1:29:00 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 78567

Mike, >>My problem is this. I suspect that when the big ones blow up, everyone is going down with the ship.<< >I suspect that this may not happen this time. I can see the internets blowing up and others flourishing, especially small cap value. < Here's the way I see. Keep in mind this is not a judgment about what to do, it's just a view based on my observation of what has happened in the past. I'm finding a lot of interesting prices among smaller cap companies that I do not know very well. I suspect that if we compare investment results between that category and the big blue chips and internets, the little guys will outperform significantly over say the next 10 years. So from a valuation and long term perspective I am totally in your camp. But I have the view that many pockets of blue chips are very overvalued and the internets are really interNUTS! I also have the view that that if the overvaluation among the premier S&P500 stocks gets corrected violently, all ships are going to sink because I think it will cause some problems in psychology, the economy, and perhaps even some panic selling etc... This market appears to be very leveraged. If however, the excesses get corrected by time and the values catch up to the prices, I think a portfolio of small caps will do great without interruption. For me it's a matter of: 1. Do I want to commit money to companies I do not know very well when they might get "really" cheap within a year or two. 2. Do I want to risk not having any ammunition when the big guys that I really love get attractive again. I do not have this issue resolved in my mind yet so I am nibbling on positions that I like but don't love while keeping a loaded bazooka just in case. Wayne