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   Strategies & Market TrendsValue Investing


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To: Ed Pirtle who wrote (7182)5/17/1999 11:56:00 PM
From: Michael Burry
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It seems to me that AAPL is incredibly undervalued

I don't know you at all, and while I agree with the endpoint of your analysis, I don't agree with the means with which you got there. I like AAPL because it IMO is now a bona fide value stock on an enterprise value/ratio basis, and is generating tons of cash. I see loads of opportunity, an extremely strong balance sheet, and little downside. And I see a huge contrarian play because a generation of security analysts have been trained to think that whatever is wrong with this world, AAPL is a part of it.

What the price will do in the next 12 months, I don't know. Whether day traders will ever mature, I don't know. Whether value will even become more important over the next year, I don't know. I just see an absolute value in AAPL at recent prices.

I do feel the greatest margin of safety was back at 34 when no one ever thought it would move, but that there remains a margin of safety for longer-term holders.

For other tech value, I'm now a proud shareholder in Oracle at 24 3/8. 30X earnings, so you gotta understand the business. After consulting with some techie friends and family and doing some DD, I finally do. It goes in the long-term hold, Buffett-like stock for me. Pairs to my AAPL and my APCC as Buffett-like tech stock long-term holds.

OK, Jim, now you can call the end of the bull market. I've gone into tech.

Mike

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To: Ed Pirtle who wrote (7182)5/17/1999 11:57:00 PM
From: Bob Rudd
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Ed: Steve Jobs has done an astounding job resurrecting AAPL from the grave...However the standards are still stacked against AAPL. True, there are some folks that can be persuaded to go for stylish colorful boxes in place of greater functionality, software availability, compatibility, and assured survival of the Wintel standard, but their numbers may be limited. This thing could still flip and die. That's what the PE is saying.
Suggest you might consider reading The Gorilla Game to get a better handle on the power of standards and how they come about.

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To: Bob Rudd who wrote (7189)5/18/1999 12:05:00 AM
From: Michael Burry
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FWIW, I think everyone knows the Gorilla Game and everyone's been investing this way because it's been successful, and this begets that. It's a chicken and egg thing. I don't see the value in it.

Call me anachronistic - I'm still trying to outsmart the market rather than follow it.

Mike

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To: Michael Burry who wrote (7190)5/18/1999 12:40:00 AM
From: Bob Rudd
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I really doubt everyone knows the Gorilla Game and from some of the comments you've made techstocks.com
I tend to doubt you consider most investors that well-read either.
If someone plans to invest in value tech stocks, they had better understand the dynamics of lock-in and standards. If a guy understands this, as I'm sure you do, and still chooses to bet against the standard, that's cool. But if a guy hasn't read Gorilla and doesn't understand the power of standards, he's definitely buying cows in the moonlight with stuff like AAPL.
This turnaround so far is amazing...maybe Jobs can keep it up, but it looks like a real longshot.
"The race isn't always to the swiftest, but that's the way to bet" Damon Runyon.

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To: Bob Rudd who wrote (7191)5/18/1999 3:48:00 AM
From: James Clarke
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<<"The race isn't always to the swiftest, but that's the way to bet" Damon Runyon.>>

Depends what the odds are, now, doesn't it? That's what's so elegantly beautiful about investment analysis. Everybody knows Microsoft is the swiftest (and everybody may even be right about that) but this is your 4:3 odds horse. (I might argue a lot of these are 1:2 horses now...even if they win, you probably still lose money.) What odds is Mike getting on Apple?

I would suggest finding Charlie Munger's comments comparing stock investing to pari-mutual betting on horses. It got me thinking.

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To: Bob Rudd who wrote (7191)5/18/1999 7:22:00 AM
From: Ed Pirtle
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I understand the Gorilla theory, but I think you sell short the installed base's dedication. I just retired a Macintosh IIci that I bought in '90. I am sure that my vote hasn't been counted in recent years. Each platform has its advantages; I own Dell, Compaq and Apple machines. Keep in mind that Apple's present visible strength increase is in first-time computer purchasers; I expect there to be some residuals from this.

:)

Ed

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To: Daniel Chisholm who wrote (7187)5/18/1999 8:50:00 AM
From: cfimx
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>>I suppose the prudent course would be to not overpay?<<

CSE has a right to expect full value for their shares. ANY seller would agree. When YOU sell some stock, that's what you want.

It MIGHT have been a good deal for nh to offer stock if its shares were trading at full value (or above) as well. IF nh wasn't, and all I read around here was that nh was WAY undervalued, then it would have been value destroying for nh to issue stock for cse. As it stands, it looks like nh IS selling SOME equity to finance a part of the deal. That may account for a portion of the drop yesterday, if it indeed closed down.

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To: Michael Burry who wrote (7188)5/18/1999 9:01:00 AM
From: Madharry
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oddly enough, I quickly looked at oracle yesterday, based on sales i gave internet revenues a 10x multiple and non internet revenues a 3x multiple and came up with a price of $25. So I see it as fairly valued by this criteria.

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To: Michael Burry who wrote (7188)5/18/1999 9:06:00 AM
From: cfimx
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>>It goes in the long-term hold, Buffett-like stock for me. Pairs to my AAPL and my APCC as Buffett-like tech stock long-term holds. <<

stocks with temporarily high roe's do not a buffet stock make. There is something vexatious about seeing his thinking reduced to this kind of simplistic comparison. It's just too easy to wave his name around a stock as if it was the national flag. Well it shouldn't be that easy. aapl, for example, is about as FAR from Omaha as you can get. We are talking Antartica here. It's a stock YOU bought. THAT doesn't make it a Buffet stock.

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To: Grant who wrote (7185)5/18/1999 9:09:00 AM
From: Mike 2.0
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Re: 21', Given a downsloping demand curve and an upaloping supply curve for a product, the imposition of an exercise tax on this product will:...

LOL...apparently the product in question is gym equipment...

Tell your friend to put his beer down and hit the books himself...

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