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Strategies & Market Trends : Value Investing

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To: jeffbas who wrote (10780)6/27/2000 1:47:00 AM
From: Michael Burry2 Recommendations   of 62493
 
As you know, I have a simple philosophy: sell on new lows.
There are two reasons for this:
1) Many people do this. It's a self-fulfilling prophecy. I try to do it quicker.
2) If I know something is a fundamental value and it breaks to new lows, the selling is irrational by definition and I don't want to be in the way of irrational selling. Better to wait for the buyers to show where they are willing to step up and give support.

I suffered for several years trying to be stubborn in the face of irrational selling and all it got me was a lot of 50% haircuts on stocks that had already been too cheap. One of the biggest lessons I've learned was that PE 8 stocks can become PE 4 stocks and stay that way for a long time. AT&T's long-distance business is getting close to trading for 1X EBITDA, yet everyone looks at it like this big albatross around T's neck. Maybe in the future I'll get the long-distance biz for free. All we need is another $15 billion in lost market cap.

That said, I love your rhetorical questions. Why do you think AT&T is getting hit?

Mike
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