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

To: Michael Burry who wrote (6738)	4/14/1999 10:42:00 PM
From: P.Prazeres	Respond to of 78602

A quick note tonight….. It looks as though the mid and small caps are on the verge of popping to the upside. On a day when the Nasdaq was down over 76 points on record volume of over 1.4 billion shares, one would have expected to see the number of decliners swamp the advancers. However, there were 2220 advancers and 1929 decliners on the Nasdaq. The NYSE ratio was even better, with 1729 advancers to 1282 decliners. Also take note of the strong move over the past few sessions in the Russell 2000. It looks as though it has put in a bottom and may be getting ready to go off to the races. Although it was only “up” by 0.15 for the day to 417.39, the Russell 2000 had been up more than 7 points at one point in the day and the majority of the drop came in the last hour. Compare the Russell's performance to some of the better known small cap value funds and a different picture emerges. These are today's performances: Berger Small Cap Value BSVIX – up 1.45% T.Rowe Price Small Cap Value PRSVX – up 1.57% Kemper Small Cap Value +2.12% The big cousins are taking a breather and quite possibly the laggards are starting to catch up. That's it for tonight. Paulo stockmotions.com SIGN UP FREE!

To: Michael Burry who wrote (6738)	4/14/1999 11:31:00 PM
From: James Clarke	Read Replies (1) \| Respond to of 78602

We're talking about two days. This is big, but it could be leading not to a soft landing, but to a final catharsis - (cyclicals run ===> Interest rates rise, BYE!) I don't believe this orderly transition is sustainable yet, and I was psychologically ready to face a runup in the stocks I sold without changing the course. That was not by any means a one month call. (Covering my Amazon short a week ago may go down as an even dumber move. This has not been a good year in Jim-land. My wife is about to take over the brokerage account. You know that feeling.) The one thing I will buy are net-nets that pass my additional tests (sustainable business, real asset value, and a catalyst). Because a) Every one of these I ever bought has gone up over 50% within a year; and b) in my experience, they have almost zero correlation with the market, even major moves. I only wish I could find more of them - its usually one every six months. Think I found one today for the first time in a year, and for the first time in two years, its not a shoe company. Let me get a position and we'll compare notes in a week or so. And here's a story for a market top. My 22 year old cousin is thinking about doing a little investing. She has been playing one-week dummy portfolios in a contest on AOL. She asked me if 34% in a week is a good return. I chuckled and asked her what she "owned". AOL, Amazon... She finds them by watching what the guy who won last week owned. ("So, not a good day today, huh?") Then she asked me about an investment term she heard - "Jim, what's a liability?" 34% in a week. Don't quit the day job. JJC

To: Michael Burry who wrote (6738)	4/14/1999 11:58:00 PM
From: James Clarke	Read Replies (1) \| Respond to of 78602

<<Jim, you've made good calls in the past. But long-term do you really see yourself a market timer forever? >> I don't see myself as a market timer now. Maybe the biggest danger in making one market call is not that you're wrong, but rather that you're dead-on right like I was last July. So then you think you can do it again. The jury is still out on this one, but so far I have passed on three stocks I otherwise would have bought. Maybe this is part of the suicidal value investor behavior you referred to. It may very well be. Its one thing running a personal account in this environment. Its quite another facing clients every quarter, and facing less of them each quarter than the one before. And you rack your brain, but can't figure out what you're doing wrong. "Oh, you're firing me because I didn't buy Amazon. OK, that makes sense." Maybe its gotten to me. For the last year, working at a value shop has been like working in a morgue. (Actually, I like Charlie Munger's metaphor better - It feels like "being a one legged man in an ass-kicking contest".) Maybe the best signal that this has to turn soon is that good disciplined value investors that you have heard of are quite literally worried about going out of business if this two tiered market persists through the second quarter. Most frustrating is that every time you lose a client, you have to sell stocks to fund the redemption, which drives your illiquid holdings down further. Sometimes you find that you are among the biggest quarterly sellers of a stock you love. Its enough to drive you to market time. If market timing satisfies the urge that would otherwise be spent doing bodily harm to yourself or others, its for the better. (I write this not to bask in misery, but rather to give you something to print out and hang on your wall to show what a growth-value inflection point might look like. Who knows, we might see similar posts on the Amazon thread in a few weeks.) Cheerfully, JJC