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   Strategies & Market TrendsBuffettology


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To: LauA who wrote (1703)7/24/1999 6:32:00 PM
From: Michael Burry
   of 4661
 
LauA,

Re: present value thinking, I'll be the first to admit that I'm not investing much like Buffett. Graham was a great investor, but Buffett took it to a new level and improved upon it. Times change, and the next great investor will certainly have taken Buffett's approach to a different level.

Mike

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To: James Clarke who wrote (1702)7/24/1999 8:52:00 PM
From: Shane M
   of 4661
 
Jim,

Here's a link discussing some technology that could materially impact media outlets like Disney. Sounds like a cool device to have too.

cgi.pathfinder.com

Shane

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To: Michael Burry who wrote (1707)7/24/1999 10:11:00 PM
From: Shane M
   of 4661
 
Mike,

Here's a little piece by Fortune on Pre Paid Legal

cgi.pathfinder.com

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To: Shane M who wrote (1709)7/24/1999 10:35:00 PM
From: Michael Burry
   of 4661
 
That's misleading. The company in its current form hasn't been around that long. If excess acquisition costs can be booked as an asset, I don't see why the commission advances can't. Just recognize what they are when you do your valuation. It's stinky, no doubt. And if the insiders start to bail, I will too. It's like the timeshares, and like Apple. The negative bias is so great, and the shorts so tremendous that it makes the perfect contrarian play.

Also, its cooperation deals with CNA and other large insurers has yielded low to nil sales. This is most concerning to me, and is the thing that makes me regret bringing it up on this board. When I come right down to it, I own it for reasons other than Buffett's tenets.

Mike

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To: Michael Burry who wrote (1705)7/24/1999 11:28:00 PM
From: James Clarke
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<<Now I've just been asked to manage a couple custodial counts for a couple just-born nieces. They'll need the money in 18 years. And you can bet Disney will be going in those too, at the right price.>>

My first baby is scheduled to pop out in three weeks, and I am starting a college fund right off. I'm thinking the same thing as you are about Disney - just waiting for the right price, then in it goes. Maybe that price comes during a market meltdown, maybe it comes without one. (I am in no hurry to invest this account with the market at 30 times earnings and interest rates going up.) The problem with this patient strategy is that my wife has loved Disney since she was a little kid with her Bambi blanket in Japan 35 years ago. So ever since I told her I'm looking at Disney she asks me every day why I haven't bought it yet so she can get the annual report. So if I miss it, I am going to have hell to pay.

"Run by morons" was probably a facetious comment. Eisner had a hell of a run with this business for five years. But the guy has always struck me as sleazy - maybe it was the half a billion of options he cashed in near the peak, maybe it was the board's payoff of several other executives to the tune of $100 million each. But I don't like to see sleazy management running a company with Disney's image. They do not behave like owners.

JJC

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To: James Clarke who wrote (1711)7/25/1999 12:03:00 AM
From: LauA
   of 4661
 
James, I don't think that I'd characterize Mike Eisner as "sleazy". That's a cheap shot from someone who doesn't know him. Re: options - I assume that if your BOD offered you a slug of options which then became quite valuable, you'd cash them too. I remember one big instance of option cashing was tax driven. Eisner has been runing Disney for 15 years, not five. The current Disney is a very, very different business than when he first started. It could be time for someone new. But you do recall that when he started there, he took over from a Disney-in-law. And he has operated with the blessing of Roy. Shareholder/owners have been pretty happy until recently. Many years ago his contract was nominal until ROE exceeded 11-12%. But above that hurdle he received a big chunk of profits. When things started, that seemed quite fair because the company had underperformed for so long. I don't know what it looks like now.

Lau

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To: Michael Burry who wrote (1710)7/25/1999 1:21:00 AM
From: Shane M
   of 4661
 
makes me regret bringing it up on this board. When I come right down to it, I own it for reasons other than Buffett's tenets.

Don't apologize for discussing PPD. I'm glad it was discussed here. PPD was showing on my screens too and I had yet to look into it. Financially it looks like a stock with the appropriate criteria. Given the context (I think it turned up on a Buffett screen you ran on your value thread, right?) talking about the business is entirely appropriate here IMHO.

Shane

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To: Shane M who wrote (1713)7/27/1999 1:22:00 PM
From: Michael Burry
   of 4661
 
Today I bought into Pepsi as a Buffett stock, and put it in one of my niece's 18 year accounts. Everyone knows it is a Buffett company. It's been run by idiots without much fail. Now it appears to becoming more aggressive. Having shed YUM and PBG, and making the EU complaint. Even making market share gains. Something's going on. And it appears cheap as these sorts of companies go. Funny, but I also bought YUM today with the intent to hold it. There's been a modicrum of insider buying in each, which is about all I'd expect in such large caps.

Mike

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To: Art Vandelay who wrote (1697)7/28/1999 11:20:00 PM
From: Shane M
   of 4661
 
Art,

More on HMA and the hospital sector. Saw this from the Yahoo thread - has a fairly good overview of the issues most players are facing.

biz.yahoo.com

Excerpt:
" And I think a third inflection point is that it's become apparent that the flogging of some healthcare providers is beginning to affect quality and access to care; as that has become apparent, I think there has been a move in Congress to perhaps moderate some of the cuts that have already been legislated.''

Shane

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To: James Clarke who wrote (1702)7/30/1999 11:52:00 PM
From: Madharry
   of 4661
 
Have you also looked at sony? Somehow they seem more forward looking to me than disney.

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