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

To: Michael Burry who wrote (6893)	4/22/1999 11:39:00 AM
From: Dan Meleney	Respond to of 78486

Mike, You have good points on my perspective. I should get out more for a reality check on the general population. While I envision retail moving to the net, I don't see the value in Amazon and am looking into leaps there as a way to short in order to avoid the unlimited exposure. As another way of looking at CPU, consider their competitors who are on the net. I'd call them "bad competitors" if they were in my business, because they aren't going after a profit today but just going after market share. "Bad competitors" drive down margins in their entire industry until the market share wars go away. OT re CPU: I used to work next to one. I'd go in weekly and see what was selling and talk to the guys on the floor. They'd even look up sales statistics for me. They could tell me how many had sold over the past week or two, how many were in stock, and what the delivery time was for any out of stock software. In this way, I found The Learning Company when it was still small but growing fast (I got out at the first acquisition). I probably got better true sales data on them sooner than they got it.

To: Michael Burry who wrote (6893)	4/22/1999 1:29:00 PM
From: Freedom Fighter	Read Replies (2) \| Respond to of 78486

Here's the numbers on VELCF. Trading this morning at 12 3/16. Some of the numbers are approximates because I am looking at the most recent annual report. Changes in the value of the investment portfolio would alter these numbers slightly. But not enough to change the general flavor of the company or value. Book Value = 4.58 Investment Portfolio at Cost = 3.16 (market is higher) Operating Book Value = 1.42 (approximate) EPS = .91 (including realized gains, interest, dividends) Earning from operations = .62 (This is a firm estimate. I do not know the exact tax rate to use in order to separate investment gains from profits) ROE on operations = 43.7% (.62 / 1.42) 5 year compound sales growth = 13% 1 year sales growth = 10.8% 1 year growth in operating earnings = 23.5% If you subtract out the value of the investment portfolio and the associated earnings you are paying less than 15x earnings for a very high ROE business that seems to still be growing well. Last year's results were affected negatively by the strike at GM and global weakness in many foreign markets. Decent results for a bad year. Growth prospects are related to new applications (ex. diapers) and associated products, and new markets. Wayne

To: Michael Burry who wrote (6893)	4/23/1999 11:43:00 AM
From: Dan Meleney	Read Replies (2) \| Respond to of 78486

Mike, one last thought (for now) on Borders & Amazon >>If I thought the way you did, I'd be buying Amazon, shorting Borders While I believe that internet commerce will far surpass where most writers on this thread expect, I don't think this will translate into more market cap for companies like Amazon. Amazon will not have a monopoly. CONSUMERS are the ones who will benefit. Still, this will take a toll on the Borders of the world even when the price of Amazon collapses. Dan