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Strategies & Market Trends : Buffettology

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To: James Clarke who wrote (1722)8/11/1999 1:32:00 PM
From: Michael Burry  Read Replies (1) of 4661
 
Pharms are often thought of as Buffett-like companies. Yet watch American Home make like Big Tobacco as it now denies the evidence and the fact that its product caused a lot of morbidity. The liability around this is potentially huge. I now look at AHP as like MO. Unknown liability, unknown valuation. Should all the pharms be thought of this way? And if so, don't they deserve a PE of 15-20 rather than 35-40? There is a huge potential off-balance sheet liability waiting to happen with each pharm, and I feel it is important to recognize this. Pharms have been taken off my "Buffett" watch list.

Mike
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