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

To: cfimx who wrote (1523)	5/24/1999 7:46:00 PM
From: Michael & B.Anne	Read Replies (1) \| Respond to of 4691

>>Exactly this sort of thing seems to be going on over the the Value Investing thread. Are we in the midst of a Golden Age of sorts, perhaps without realizing it? Or are these sorts of opportunities usually available to the diligent value investor?<< exactly -- let's run a set of investment portfolios (sorta like a contest) and find out -- is it a golden age or are some/many really (if not day trading) week trading -- using Buffettesque ratios as a (perhaps the sole) basis for pre screening opportunities. And even if they are, perhaps they can show better results (than the buy and holders) by being smarter, faster, and able to fly lower. No surprise, my bet is on the buy and holders -- my conjecture is that they, by necessity, must see a higher level picture with a more predictable outcome. regards although watching BRK erode day after day is testing (not breaking) my faith in my abilities to see such a higher level picture - sigh :(.

To: cfimx who wrote (1523)	6/8/1999 10:21:00 AM
From: cfimx	Read Replies (2) \| Respond to of 4691

when an analyst throws out a bunch of numbers they get from some database and use them to justify their view of a stock, good or bad, they are doing the antithesis of buffet style analysis. That's ironic when it is done on a BUffet thread. Any practiced reader of Buffet would know that he disregards amortization charges, of which TLC has or had a large amount of and MAT may as well. He also disregards goodwill on the balance sheet. So any attempt to offer up an roe calculation without making these adjustments, I, and Buffet would say is pure folly. What a company earns on "unleveraged OPERATING assets" is the important number here. And just regurgitating stuff you download from a database won't get you there. And you can't look at debt to equity or capital to determine whether the company is appropriately capitalized. That takes an understanding of the business. Equity, as we have discussed, can be skewed by non cash charges and share buy backs. It's highly likely that "they don't have to work down" ANY debt. It may be that they should take on MORE of it. The database won't tell you that. Providing an opinion on stocks from this kind of data has about as much value as trying to determine where MAT will be two years from now by looking at a chart.

To: cfimx who wrote (1523)	6/9/1999 5:22:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 4691

Ok, Twister, since you are either not able or not willing to read my entire last post, I'll take up another issue with you. Don't forget that Buffet "flipped" Disney and AMEX back in the partnership days. Is anyone saying that he would NOT have been better off HOLDING those stocks? Those are not the sorts of stocks he flipped so profitably at all, and you should know that. Take a look at the back of Hagstrom's latest book. It has a nice chart with stocks making the rows and years making the columns. Buffett's buy and hold forever philosophy is a little more vaunted than real.But then we knew this. Only a few are permanent holdings. He tells us this nearly every year. As for the focus part, Hagstrom virtually and unknowingly writes Buffett off as a statistical anomaly when he argues, with normal distribution curves, that the lower the number of stocks that one holds, the greater the odds that you will fall several standard deviations to the right or left of the mean. He basically makes the case for diversification while arguing against it, a tendency in argument that I see in you too <g>. Yeah, I know I a guy that killed Buffett. Started working for Microsoft in the early 90s and held exactly one stock. You completely ignore all the Berkshire stocks that he has "flipped" when you say that he could still be holding his partnership stocks and have done better. Does anyone remember all the cyclicals he's had been into? Even Handy & Harman, WHX's latest acquisition for non-followers of the Value Investing thread. IN NO WAY does Buffett say that if he'd never sold a stock he bought he'd be better off. In the case of McDonald's, when he says he shouldn't have sold, I think he reveals a weakness. Where's that certainty that he claims he has? He basically flipped McDonalds, and then a year later when it was up said it was a mistake. What was a mistake? The buying, the selling? The fact that he missed out on the gains subsequently handed out by Mr. Market? As smaller investors, I still maintain we have a huge advantage over how Buffett must invest now. And in his statements he seems to long for the flexibility he once had. I'm sure he's thinking of the potential excess returns. Mike