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

To: Michael Burry who wrote (7409)	6/6/1999 1:53:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78652

re: accounting/financial prof's and making money in the stock market I never can come to a good conclusion on this stuff. If accounting professors are expert at financial warnings and this is important, then categorically these folks should have an overwhelming advantage over the rest of us who are ignorant. So why aren't they rich from stock market investing? Or maybe at least a few are. (Graham/Whitman??) Seems to me, when there's a company blowup, people -- especially professors -g- -- go back and look at the financial statements, and say, "yes, it was obvious if only anybody (who knew anything about financial statement analysis) looked". But just prior to the blowup, one probably saw plenty of buy recommendations on the stock from analysts. If expertise in financial accounting is profitable and important or necessary for investment success, why aren't these guys managing funds rather than teaching MBAs in ivory towers? (Again, maybe they are. And I may be confusing accounting and finance expertise here.) My own proclivity is to assume that some stocks suffer from misleading or illegal accounting. Rather than spend eons combing through each potential and actual purchase, I'll play the diversity game and just assume 10% of my positions will bite me because of financial items that could have been detected but were not. And I do have my 10% :>(

To: Michael Burry who wrote (7409)	6/6/1999 2:37:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78652

Mike, re: wisdom and perspective. My opinion is that it is most often seen not in the picking of stocks, but in the selling of stocks. Also it shows in congruency of one's investment style with one's personality.

To: Michael Burry who wrote (7409)	6/6/1999 6:28:00 PM
From: Bob Rudd	Respond to of 78652

Mike: <<grizzled veterans wisdom and perspective>> I didn't mean this to in any way to imply that folks newer to the game don't bring a lot to the party. I too have seen posts by 15 year olds that were quite insightful. Especially in changing times, experience can produce tunnel vision, so those with newer points of view should never be ignored for lack of it. I just meant that I didn't see anything in this guy's resume iac.gatech.edu that indicated he's done forensic accounting from an investment perspective in the real world. If the book were $29 instead of $92, I wouldn't nitpik, but for that price I want to really KNOW he brings something special to the table. If James Chanos retires to teach accounting and writes a book with the description of Financial Warnings, I'll pay $92 because he has a lot real world experience as a short-selling hedge fund manager.

To: Michael Burry who wrote (7409)	6/6/1999 7:38:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78652

I think we are combining two distinct issues. One is stock picking/ideas related to age. I don't see anyone arguing that stock picking/ideas/good thought-through posts/etc. are a function of age (assuming one is at least old enough to read/write). The 15 year-old can be assumed to be indistinguishable from the 50-year old. And wisdom and perspective don't necessarily enter in to it. But if anyone "doubts there is such a thing as grizzled veteran's wisdom and perspective" regarding making money in the stock market, I will argue with that. There's a heck of a lot more to the process, as we know, than just identifying good stocks. Like knowing when to hold, being able to hold, when to add, when to sell, understanding our own risk tolerance (which means being aware of our own personality), understanding the purchase in terms of the overall portfolio (not just as a stock out there by itself). In this market, with 15-year old kids having newsletters and national followings, and maybe even good performance records (why not? Everything seems to be blooming now.), it just isn't easy to see. But for anyone with 8-12 years buying and selling stocks - imo, they will have have a veteran's perspective which is quite different from someone with ony three years' experience (whether that three years is from a 15-year old or from a 50-year old).